When sports betting was legalized across states, lobbyists held the argument that not only betting operators stand to benefit from it. What was then the only speculation now also has the numbers to prove it - thanks to the American Gaming Association.
AGA recently commissioned a study alongside Nielsen Sports to prove that MLB and NBA annual revenue would increase once the rest of the US states catch up to the NJ sports betting market.
The study estimated that even excluding the two other major leagues - the NFL and NHL, revenue would grow by $1.7 billion! If you put football and hockey into the mix, the estimated total for collective sports betting revenue becomes $4.2 billion.
If once we suspected that there’d be something in it for sports stakeholders as well, now we know for sure - legalized sports betting is a win-win affair.
Now all that’s left is for confirmation of betting supporters’ second biggest pro-legalization argument - that it will also generate jobs and other advancements in local economies.
Here’s what Nielsen Sports’ study factored into the results. In the last two weeks of May, 1,032 people took part in the study, all from different states and over 18 years old. Some were merely sports fans, others admitted to being sports bettors and they were all asked to describe in their opinion how a “national, legal sports betting market would affect the sports consumption habits of non-bettors, casual bettors and avid bettors.”
Later on, Nielsen Sports applied different methods to translate the suggested consumption habits into changes in revenue. What the study revealed was the potential for a $1.1 billion spike in MLB’s revenue and $585 million in the NBA’s - as a result of commercialized, available betting such as the sports betting industry in New Jersey.
As sources of the potential increase in profits, Nielsen Sports listed advertising investments by sports betting operators, sponsorship deals, data purchases and bigger demand for the MLB’s and NBA’s media outlets and other products.
One of the main arguments presented by the company is one that’s actually quite logical - legalized sports betting leads to more views, more engagement and ultimately, more fans. That means major leagues like the MLB and NBA could stand to profit from anything from media rights to selling merchandise. Just the increase in product sales could drive $952,000,000 for MLB and $425,000,000 for the NBA.
The study even went the extra mile to separate these numbers into various sectors: $596 million from TV ads, $267 million from sponsorships, $89 million from data and video revenue and the remaining $3.28 billion from indirect sources such as media rights, sponsorships, merchandise, and ticket sales.
This is not the first time AGA have used research from Nielsen sports to link legalized sports betting to increased revenues in major sports leagues.
Not so long ago, the two organizations worked together on revenue projections for the NHL and NFL and the numbers were just as impressive. There was an estimated $2.3 billion spike for the NFL and $216 million for NHL. According to these studies, major sports leagues stand to profit from legalized betting even more than the states that would collect the taxes.
A big factor for profits is the flow of data - data providers could end up spending $160 million on the NBA and $154 million on the MLB to supply sports betting operators with the data they need. Other incomes include: