Tennis events make big revenue bet
The COVID-19 pandemic gave Eddie Gonzalez an opportunity to prove a point. With the ATP and WTA tours suspended because of the virus, Gonzalez organized the All-American Team Cup, a men’s tennis exhibition in Atlanta sponsored by DraftKings.
Stemming from its match-fixing problems of the past decade, the ATP has a moratorium on its tournaments signing or renewing deals with sports betting companies, like DraftKings. An ATP spokesman said the tour’s final position on tournament betting sponsorships is still to be determined. The WTA does not have a ban on tournament gambling sponsorships, though it does have strict rules governing them.
But with tennis reeling from dozens of canceled tournaments and hundreds of millions of lost revenue dollars, gambling sponsorships are again interesting tournament directors as a way to address sudden financial voids. Gonzalez, the chief business officer for GF Sports and tournament director for the ATP’s Truist Atlanta Open, wanted to use the pandemic tour suspension to show that sports betting companies could be valuable and ethical partners for the sport.
“I don’t think gambling or betting should be a dirty word, as long as it’s done transparently and regulated, which it is,” he said.
Sports betting, data companies backstop tennis
Gamblers’ interest in tennis, according to Freddie Longe, IMG Arena senior vice president and managing director, stems from the immense volume of matches continually being played across the globe, while the sport’s formulaic structure — a definite point outcome every 30 to 60 seconds — lends itself very well to in-play betting.
“We think that tennis will be a very popular product in the U.S., as it is in the rest of the world,” said Longe.
It was natural for DraftKings to get involved with tennis this summer. Johnny Avello, DraftKings’ head of sportsbook, said the sport is responsible for the company’s fourth biggest handle behind football, basketball and baseball. The All-American Cup was the first tennis competition that integrated live odds from DraftKings into its broadcast (on Tennis Channel), and it was also livestreamed in DraftKings’ app, reaching nontraditional tennis fans too.
Gonzalez said the event wouldn’t have been possible without DraftKings’ financial backing. Data companies were also key partners for exhibitions like Grand Slam Tennis Tours’ MatchPlay 120 series, which partnered with Genius Sport in a revenue-generating deal for an event that had no live audiences or broadcast deals.
“All these various events that have been going on have largely been driven by these data companies,” said agent Sam Duvall, whose company oversaw the MatchPlay 120 series.
“It’s maybe not public-facing, but it’s the mechanism which has been able to continue to run to support a lot of players.”
The value of data rights is ballooning across all sports, especially in the U.S., where sports betting is becoming increasingly legal and popular.
“Fast, accurate, reliable and credible data that originates from the sports federations themselves, therefore the single source of truth, is an incredibly valuable product from a sportsbook’s perspective,” said Longe. “As sports betting has grown globally, sportsbooks’ appreciation for quality data feeds has kind of grown as well.”
That’s reflected in the enormous data rights deals that tennis’ governing bodies have signed in recent years. The International Tennis Federation, which oversees the World Tennis Tour — the sport’s lowest professional level where players’ rankings average in the high hundreds, prize money is meager and public attention minimal, creating ripe conditions for corruption — has a five-year, $70 million deal with Sportradar. And the ATP and IMG are understood to be in discussions regarding a lucrative long-term deal.
“The fact that tennis will simultaneously take $100 million [a year] deals from data groups that obviously and very clearly support betting on tennis, and then prohibit events and athletes from having access to those companies themselves, it seems like there is a disconnect there and it doesn’t serve the sport,” said Kyle Ross, tournament director for the MatchPlay 120 series.
Why things could change
The Tennis Integrity Unit was launched in 2008 to police tennis’ corruption issues, like match-fixing or the illegal sales of tournament wildcard spots. Funded by the ITF, the Grand Slam Board and the ATP and WTA, the TIU’s budget has more than tripled to $7.23 million in the past four years, while the 138 suspicious matches it tallied in 2019 was the fewest since 2015. Reducing the sale of ITF World Tennis Tour data rights has helped; 71% of the suspicious matches flagged in 2019 happened on the World Tennis Tour, according to the TIU’s annual review. And, the TIU works closely with data companies like Sportradar, which has over 100 dedicated integrity monitoring employees, giving tennis a wider net to flag sketchy-looking match results.
“I feel like they’re the key piece that would allow this to work,” Ross said.
The financial motivations are also considerable. One source told Sports Business Journal that several European tournaments lost six-figure deals with betting companies when the moratorium was passed in 2018, amounts roughly equal to the average annual profit for the ATP’s smallest tournaments, the 250s. Raul Zurutuza, the tournament director for Mexico’s two ATP Tour stops, said ATP events of all sizes are interested in gambling sponsorships. He already has a company, Mexican betting firm Caliente, lined up for a sponsorship deal if the moratorium is lifted.
“I think without any doubt this is going to be seen differently,” Zurutuza said.
Gonzalez expects a retraction of tennis sponsorship dollars from several key categories in the next few years, including the travel and automotive sectors.
“But as history has shown,” he said, “challenges always create opportunities and there will be new categories and new opportunities.”
A source told SBJ that the issue was originally to have been discussed this summer at Wimbledon but was pushed back to year-end tour meetings, which normally coincide with the ATP Finals in London. Gonzalez, Zurutuza and others will be ready to make their pitch whenever a meeting is held.
“The board is very much aware of what we want,” said Zurutuza.
Editor’s note: This story is updated from the print edition.