Legalized Sports Betting: U.S. Media Business Impact Report

Legalized Sports Betting: U.S. Media Business
Cheyne Gateley/Variety Intelligence Platform

It’s been nearly two years since the U.S. Supreme Court struck down a decades-old law (the Professional and Amateur Sports Protection Act, or PASPA) that had banned sports betting nationwide and essentially limited gambling activity to Nevada.

Currently, the road is paved for sports betting to become legal across the U.S., and it’s already legal in over 10 states.  

And sports betting activity heated up in 2019. Last year in New Jersey, which was one of the first states to legalize sports gambling after the Supreme Court’s decision, bettors wagered a total of $4.5 billion. Comparatively, over $1 billion was wagered during the seven months of 2018 that sports betting was legal in the state. 

Sports betting operators with New Jersey made $300 million in 2019, but there’s a long runway for revenue growth for gambling companies in all states. Morgan Stanley in November 2019 predicted the U.S. market could generate $7 billion in revenue by 2025.

It’s no wonder why sports betting legalization has been widely expected to trigger a tidal wave of sports gambling dollars for the media business. 

Hoping to capitalize on legalized gambling bringing certain sports networks higher viewership, and subsequently greater ad revenue, Sinclair Broadcast Group reached a deal with Disney in May 2019 to acquire the latter company’s 21 regional sports networks (RSNs), which offer 5,300 live sports events per year.

More recently, gambling operator Penn National in January of this year bought a 36% stake in Barstool Sports for $163 million, which values the publisher at $450 million. Under the deal, Penn gets the exclusive right to use the Barstool brand for all of its online and retail sports betting products. 

Similar deals are likely to occur in the remainder of 2020, as digital media companies look to further diversify their revenue streams, and gambling operators look to capture a bigger portion of betting dollars that are otherwise wagered illegally. 

But just how quickly will sports betting grow over the next few years, and who will be the biggest beneficiaries? And more importantly, how likely is it that market sizing predictions made recently will fall short?

Read on to learn about:

1

Assessing the size of the potential audience for legal sports betting, looking across a broad range of estimates

2

How much media businesses stand to gain from legalization, and the factors that could diminish their return on investment

3

How sports TV will be transformed by gambling across ratings, demographics and programming, including exclusive survey data