Max Pacioretty of the Vegas Golden Knights scores against the San Jose Sharks in Las Vegas. (Photo by Ethan Miller/Getty Images)
The National Hockey League could see as much as $216 million in new revenue from legalized sports betting according to a recent Nielsen Sports report commissioned by the American Gaming Association (AGA).
The study is one of a few the gaming industry’s leading trade association has commissioned to explore how sports betting will impact top-line growth at major sports leagues. The NFL is expected to gain significantly more, with an earlier report suggesting revenue growth of $2.3 billion for the football league.
Leading these estimates across professional leagues is the expectation that betting operators will pay big bucks to advertise their services, receive league data so they can better inform users and set lines, and endorse athletes and teams with sponsorships, according to the AGA. For the NHL, that kind of spending could generate an additional $65 million in revenue, broken down like this: $24 million on advertising, $35 million on sponsorships and $6 million on data.
Another source of revenue is expected to be driven by increased consumption of media and products produced by the leagues themselves. Greater fan engagement and viewership could boost media rights, sponsorships, merchandise, and ticket sales by 3.5 percent, producing $151 million in new revenue.
These numbers, of course, are simply guesses. Nielsen said it derived its revenue estimates by polling 1,000 adult sports fans about how legal betting would affect the sports consumption habits of non-bettors, casual bettors and avid bettors. The changing betting landscape will undoubtedly fuel increased interest in sports overall as more digital and in-arena services and media products are restructured to support in-game prop bets.
“Today’s announcement reaffirms that legal, regulated sports betting will create significant new revenue opportunities for sports leagues,” said Sara Slane, AGA’s senior vice president of public affairs, in a statement. “Much like the NHL’s recent successful expansion into Las Vegas, legal sports betting will continue to expand across the country, bringing with it a $216 million opportunity for the league.”
Last year, the NHL approved a new Las Vegas-based franchise: the Vegas Golden Knights. The team had one of the strongest inaugural seasons in sports history, setting a record for most wins by an expansion team in a debut season and reaching the playoffs. The team simultaneously experimented with a host of new technologies, such as a Twitch channel for fans, a Facebook Watch series, and lower-priced digital tickets for the playoffs.
The NFL also recently approved a Vegas team, with the Oakland-based Raiders set to relocate to Las Vegas beginning with the 2019-20 season.
SportTechie Takeaway
The report on the NHL, which comes one day before the start of the season, is AGA’s second that attempts to show how legalized sports betting will benefit major leagues, following one it released on the NFL last month just ahead of the football season. The trade organization will likely release reports on MLB and the NBA too, as it works through the major U.S. leagues. Both MLB and the NBA have been proponents of legalized sports betting. The NBA recently struck a multi-year deal with Vegas-based MGM Resorts International that makes the casino operator the “official gaming partner” of the NBA and WNBA.
