On Monday 14th May 2018, a ruling was made by the Supreme Court to overturn a 26-year federal law that effectively banned commercial sports betting and the opportunity for sports organizations to secure betting partners. The 2018 ruling offered the opportunity to legalize an illegal market estimated to have been worth $150 billion from illegal wagers on professional and amateur sports.
After the overturning of these betting laws, betting companies were quick to seek opportunities to partner with the “Big Four” sports leagues in the US. The National Basketball Association (NBA) attracted five companies associated with sports betting and generated $49.83 million in total from them for the 2018-2019 NBA season.
The largest of these five deals was with international gambling brand, The Stars Group, who agreed to a two-and half-year deal with the NBA worth $20 million annually according to GlobalData. Subsequently, the National Football League (NFL) attracted three companies to come on board with the US’ most profitable league. The NFL received $62 million in total from betting sponsors in the 2018-2019 season which included $30 million from the casino operator Caesars Entertainment who had a three-year deal in place worth $90 million according to GlobalData, to serve as the NFL’s first-ever casino partner.
Since 2018, companies associated with betting such as DraftKings, Caesars Entertainment and Sportradar have created substantial sponsorship portfolios across a variety of sports in the US. Together these three key players in the sports betting industry have spent over $1.7 billion collectively, the most on sports sponsorship deals, in the US since 2018, including deals with the “Big Four” leagues.
The daily fantasy sports contest and sports betting company DraftKings are the industry leaders in sports sponsorship investments in the United States. GlobalData estimates that DraftKings has spent $801.79 million across 48 individual deals, many highly lucrative, including a five-year deal with the Ultimate Fighting Championship, which GlobalData estimates to be worth $350 million. DraftKings also have had standout deals with members of the “Big Four” sports leagues which include two deals worth an estimated $40 million each with the NFL and Major League Baseball.
Since the legalization of sports betting in 2018 the US, Americans have bet an estimated $125 billion, an astonishing figure in only a four-year period. A study from the business intelligence company Morning Consult highlighted the increase in sports betting in the US, showing that the share of adults who placed bets on sports at least weekly more than doubled from 5% in January to 12% in December 2021.
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Likewise in December 2021, 18% of adults in the US aged 21 and older stated that they had placed a bet on sports at least once a month, a staggering 80% increase from a survey conducted in January 2021 in which 10% of respondents detailed they bet at least monthly. These figures emphasize exactly why betting companies in the US are flocking to be involved in partnering with the nation’s biggest leagues as they strive to take advantage of this rapidly growing market. A big factor in the rise in sports betting across the US is a major increase in spending on digital market campaigns on social media and television by America’s biggest sportsbooks such as DraftKings and FanDuel during major events such as Super Bowl LVI.
The continued year-on-year rise in the number of Americans placing bets on sport, along with the increasing list of companies associated with sports betting partnering with the “Big Four” leagues in the US, raises concern that the “Big Four” leagues are not doing enough to limit the risk of sport fans developing gambling addictions and are instead concerned more about the pursuit of profits. America is estimated to have 3.6 million people who have severe gambling addictions.
Gambling addictions can often lead to other addictions and other issues the biggest of which is increased risk suicide. Therefore there is a strong case for the “Big Four” leagues supporting organizations such as the National Council on Problem Gambling (NCPG) in their vision of addressing problem gambling through public education programs and help services.
The leagues are also in a position to pressurize their partners such as DraftKings, Caesars Entertainment and Sportradar to ensure they are also taking steps to reduce the chances of addiction by allowing players to set deposits and spending limits. To conclude, sports betting in America has seen an explosive rise since its introduction in 2018 and it does not seem that it will be slowing down anytime soon.
The number of companies associated with betting looking to partner with the nation’s sporting organizations is only likely to increase. Therefore, organizations such as the “Big Four” must demonstrate their social responsibility by highlighting responsible betting and helping those suffering from the effects of gambling addiction, otherwise there is likely to be a push to ban organizations from accepting sports betting deals as in Spain and Italy. That threat should certainly concern the “Big Four” as they strive for continued revenues from their growing list of sponsors.