ESPN and Fox Sports unveil contrasting strategies as they target sports gambling market
Over a five-day stretch this month, ESPN and Fox Sports took their biggest steps in the sports gambling space, potentially jump-starting a market that the bigger sports industry largely has viewed as a huge, untapped revenue source.
The two media giants are pursuing different strategies. ESPN plans to profit on the growing legalization trend through programming and advertising. Fox Sports wants to help consumers actually make bets.
ESPN will build a set on the Vegas strip, above “The Book” at the Caesars-owned Linq Hotel & Casino, and has committed to produce a sports gambling-focused weekly show. Caesars, which will become ESPN’s official odds provider, committed to buy advertising on ESPN’s platforms.
“We continue to take the brand to new places,” said Connor Schell, ESPN’s executive vice president of content.
Fox Sports went one step further. It partnered with The Stars Group on a Fox-branded app called Fox Bet that will allow consumers in states where gambling is legal to place real money wagers on games. Fox bought a 4.99 percent stake in The Stars Group and has the right to take a 50 percent stake within the next 10 years.
“This is a deal that perfectly aligns our incentives for the long term,” said Eric Shanks, Fox Sports CEO and executive producer. “It locks up Fox Sports’ brand with a global sports wagering operator. The investment that Lachlan Murdoch is allowing us to make in The Stars Group clearly says that we’re committed to this for the long term.”
Sports media executives have been excited about the revenue potential around gambling ever since last year’s Supreme Court decision that opened the door for states to legalize sports wagering. Legalization is happening on a state-by-state basis, which has kept media companies from rolling out big gambling initiatives so far.
Bleacher Report dabbled in the space last November during “The Match” — the pay-per-view golf event with Tiger Woods and Phil Mickelson that featured real-time odds on screen. Three months ago, Turner Sports signed its own deal with Caesars that will see the company build a Bleacher Report-branded studio inside the Caesars sportsbook.
Caesars’ deal with Turner did not have any exclusivity clauses, which allowed it to cut a similar deal with ESPN just three months later.
Until this month’s announcements, ESPN and Fox Sports had been content to dip their toes in the gambling waters with studio shows that run on their linear networks. Fox Sports debuted “Lock it In” last fall. ESPN started producing “Daily Wager” two months ago on ESPNews, and Schell said the amount of programming dedicated to gambling will grow on ESPN.
“You’ll continue to see that show grow on linear networks and then we’ll try to figure out if we do a specific digital show. That’s the spirit of the deal [with Caesars]. We started a multiyear relationship. The expectation on both sides is that the relationship will grow and will lead to integration into existing programming and new programming.”
That does not mean that Joe Tessitore will be talking about point spreads or betting odds during “Monday Night Football.” At least in the short term, ESPN will keep betting references out of live events.
“Incorporation of that kind of content into live event presentations is, in many cases, governed by the rights agreement in terms of what’s permissible and what’s not permissible,” said Burke Magnus, ESPN’s executive vice president of programming and scheduling. “Broadly speaking, we think the proliferation of legal sports gambling is going to create more engaged sports fans that will then manifest itself in the viewership, both in terms of reach and time spent.”
“We’re thinking about the space in very responsible ways,” Schell said. “We know there are fans interested in our content and we’re going to serve those fans with information, analytics. We are not a tout service. We are not promoting betting in any way. But we do understand that there is an overlap between sports fans watching on air and interest in that type of content, which is really an extension of what our news and information has always done.”
Other recent moves in sports gambling
States sign on
Add Indiana, Iowa and Montana to the list of states that have approved legalized sports betting. On May 3, Montana became the first state to legalize sports betting this year. Six days later, Indiana Gov. Eric Holcomb signed a bill that legalizes sports wagering in the state, and last week, Iowa Gov. Kim Reynolds followed suit. Most importantly for the sports industry, all three states will allow mobile wagering. So far, sportsbooks are up and running in eight states. Four more, plus Washington, D.C., have passed legislation and are crafting regulations.
Research firm GamblingCompliance last week predicted sports betting will spread to 34 states and generate $5.7 billion in annual gross gambling revenue by 2024.
No ads on campus
Leading sportsbooks including MGM Resorts, William Hill, DraftKings and FanDuel have agreed not to advertise sports betting on college campuses and will tag their ads with responsible gaming messages as part of a sports wagering marketing code announced last week by the American Gaming Association.
Hosts with the most
At the start of the month, the NCAA rescinded a policy that had barred championship competitions from being held in states that allow sports betting.
NASCAR announced a gambling deal with Genius Sports, which will license and distribute the sanctioning body’s live data for sale to sportsbooks and work with it to develop an in-race betting product.
Sportsbooks in New Jersey continue to report brisk business, bringing in $21.3 million in gross gambling revenue on $313.6 million wagered in April, with $16.6 million in GGR and $254 million of handle coming through online or mobile. That was down slightly from March, a record month in which New Jersey sportsbooks handled $373 million
in bets thanks in part to March Madness. Nevada sportsbooks also had their busiest month ever in March, taking $597 million in wagers.