North America 2020: The land of opportunity revisited
It is not often in these pages you read about the United States or Canada as trailing markets in any aspect of sports business. Today, however, we’ll explore one area of the sports business where we are rightfully considered “Third World” territories — sports wagering.
The fact is when it comes to sports wagering, we’re woefully behind mature markets like Europe and Asia. Just look at the English Premier League, where football clubs reportedly average more than $600,000 a year in sponsorship from legal sportsbook operators. Football fans all over the world, except of course here in North America, are able to place a wager on their favorite club right at the stadium or from the comfort of their home on a mobile device.
In the U.K., the saying goes that sports wagering and football go together like custard and English pudding. In North America, it is more like oil and water. Until sports wagering is legal beyond Nevada and Delaware and U.S. leagues adjust their policies accordingly, North American sports executives are prohibited from pursuing the millions of dollars that sportsbook sponsorships could represent.
That is not to say sports wagering isn’t already a big business in the United States or Canada. Recent estimates by the American Gaming Association place legal and illegal sports wagering at $380 billion a year. Nevada, the only mature and highly regulated single-game sports wagering market in North America, should approach $4 billion in legal wagers in 2014.
No, we in North America like a little action on games just as much as our friends across the pond. It’s just that as
|The English Premier League fully embraces the gaming industry, as evidenced by these in-stadium betting posters at a match this year.
So kudos to the highly respected and innovative Scott O’Neil for his multimillion-dollar sponsorship deal with PartyPoker for the Sixers, Nets and Prudential Center. In announcing the deal, Bloomberg quoted O’Neil as saying, “This is our flag in the ground that we do things differently. We’re looking for groundbreaking opportunities with companies willing to take chances.”
What strikes me about this deal isn’t just the reported $10 million in sponsorship revenue O’Neil is collecting from the recent legalization of online gambling in New Jersey. Rather, it is the partner he chose in PartyPoker parent Bwin.Party Digital Entertainment that has me believing this was truly a watershed moment in the U.S. market.
For those of you unfamiliar with Bwin, it is one of the most aggressive sportsbook operators in the world, with business relationships spanning top-tier soccer properties including Manchester United (owned by Tampa Bay Buccaneers owner Malcolm Glazer), Juventus, Bayern Munich and Real Madrid. By partnering with Bwin, O’Neil in fact planted two flags in the ground, not just one. The obvious flag will drive current-day sponsorship revenue from a legalized online gambling provider in New Jersey. The second, and equally important flag in my opinion, will be the knowledge and insights gained as to best practices globally when the walls to sports wagering inevitably come crashing down here in North America.
|Fulham FC’s jersey deal with Marathonbet is worth a reported $3 million a year.
Rather, let’s close with a hypothetical look ahead to a more robust U.S. and Canadian market for sports wagering in 2020, when Juniper estimates that 164 million people worldwide will gamble on their mobile devices. Imagine these following headlines in SportsBusiness Journal off “theoretical” sponsorship deals done by two U.S. clubs with an advanced understanding of the market potential based on their English Premier League experiences.
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BOSTON, Feb. 16, 2020 – Red Sox ink three sponsorship deals for official betting relationships.
In the first deals of their type in the United States, the Boston Red Sox today announced three agreements for the rights to official sports wagering status with the 11-time world champions.
In North America, including all wagering signage and kiosks at Fenway Park, the Fenway Sports Group has signed a long-term exclusive agreement with Las Vegas-based Southpoint Sports Book, owned and operated by Gaming Hall of Fame member Michael Gaughan. In Europe and Asia, Fenway Sports Group extended its current relationships with Paddy Power (U.K., Ireland and Italy) and 188BET (Asia). All three relationships carry with them exclusive mobile wagering rights with live data feeds within their respective territories.
Terms for the deals were not disclosed, but industry estimates place the collective haul at more than $15 million a year for the Red Sox.
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JACKSONVILLE, June 4, 2020 – Jaguars sign Marathonbet to stadium naming-rights deal.
Marking the first stadium naming-rights deal with a sportsbook operator in North America, the Jacksonville Jaguars announced today the signing of a 10-year agreement with Marathonbet to sponsor their home stadium and practice facility.
In announcing the deal, Marathonbet’s president and chief executive, Graham Luke, noted, “Shahid Khan and his people have been tremendous partners to work with in England around Fulham FC. They will be the ideal partners and platform from which we can introduce ourselves to North America as the sportsbook ‘where the world comes to play.’”
The naming-rights and sponsorship deal has been estimated to be worth $7.5 million a year and will allow Marathonbet to place its wagering terminals throughout the stadium in Jacksonville. While the team won’t participate in proceeds off the wagering handle, the premium paid on the deal is significant.
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I realize many of you may be rightfully skeptical of these aggressive prognostications. But if I had asked you five years ago whether marijuana would be legal anywhere in the U.S., would you have answered yes? It should leave you something to consider while we await word from the Supreme Court on its intent regarding the NCAA v. New Jersey case.
Jeff Price is the former president of Sporting News and founder of Acorn Sports Ventures.