Media Sector Investment in Sports Betting Heats Up as Legalization Approaches Three-Year Mark

Media Sector Investment Sports Betting Heats
Cheyne Gateley/VIP

It’s been nearly three years since the Supreme Court struck down the law (PASPA) that had banned sports betting nationwide and essentially limited (legal) gambling to Nevada. 

Since PASPA was overturned on May 14 of 2018, more than half of U.S. states have moved to legalize sports betting in some way. As of March 18, 21 states and D.C. offer sports betting via brick-and-mortar or online sportsbook, while 16 additional states have introduced some sports betting legislation, per the American Gaming Association (AGA).  

Legalized sports betting has long captured the imagination of media moguls due to the sheer size of the illicit gambling market. Likely bolstering this interest is the fact that the pandemic didn’t appear to completely derail the growth of legalized sports betting. 

Of the 11 states that offered legal sports betting in 2019 and 2020, seven saw year-over-year (YoY) increases in the amount wagered last year, per the AGA. Also tellingly, Pennsylvania and New Jersey, the biggest U.S. sports betting markets outside Nevada, generated sports-betting revenue totals up 140% and 31% YoY, respectively.  

This momentum seems to have recently manifested itself by way of media company-sports betting entity partnerships: 

  • Dish Network and DraftKings partnered in deal that allows certain Dish viewers to begin wagers from their TV screens. (March 3)  
  • Digital media startup Wave.tv partnered with FanDuel to create and distribute sports betting content across social platforms. (March 3) 
  • ESPN announced it was launching a new sports betting-focused podcast and related radio specials. (March 11)  
  • DraftKings acquired Las Vegas-based sports betting media company VSiN. (Mar. 30) 
  • Audacy and BetMGM struck a partnership that will bring the gaming platform’s content to the radio giant’s broadcast stations. (Mar. 30) 

These deals bank on the idea that legal U.S. sports betting activity will continue to grow in the years ahead, though this growth in gambling might be better tracked by things like gambling app usage and amounts wagered, rather than things like linear TV sports viewership. 

For instance, the average audience of NBA and NHL games respectively dropped 27% and 8% between 2019 and 2021, VIP analysis recently found.   

Meanwhile, average viewership of NFL games in 2020 was down about 6% year-over-year, and that represented the league’s first ratings decline since 2017. 

Of course, these ratings declines shouldn’t really be tied too heavily to sports betting, given big games are nationally televised while betting still isn’t legalized in every state. But the declines still imply legalized betting might not be the ratings savior some had hoped it could be. 

Despite ratings, evidence of deepened engagement with pro sports content due to sports betting availability exists.  

For example, total U.S. downloads for FOX Bet Super 6, FanDuel Sportsbook, DraftKings Sportsbook, BetMGM Sportsbook and Bet On Sports reached 593,000 during the week of February 1-7 (the week of the Super Bowl), a figure 166% higher than during the week prior, according to data from Sensor Tower provided exclusively to Variety Intelligence Platform.   

Perhaps that’s why we’ve seen more sports leagues embrace sports betting as of late.  

The UFC at the beginning of March named DraftKings as its first official sportsbook in a deal reportedly worth $350 million, while NFL Commissioner Roger Goodell in March implied he is aiming for games to better appeal to sports bettors (a departure from how the NFL used to acknowledge gambling done on pro football).  

This type of league-sportsbook embrace will likely increase as more states legalize sports betting. As many as 37 states might offer legalized sports betting by 2023, projects Eilers & Krejcik. 

But a notable hurdle to accelerating sports betting activity will be ensuring it’s convenient to do in states where betting is legal.  

As evidence of this, just take a look at the sports gambling activity in Arkansas and Iowa, as pointed out by Sports Betting Dime. 

Both states launched sports betting in 2019 and have comparable populations. But Iowa allows mobile sports betting unlike Arkansas, and generated nearly 10 times as much sports betting revenue as the southern state in 2020, per AGA

Despite this seemingly clear path to boosting gambling revenue, lawmakers in certain states may oppose making sports betting as widely accessible as possible over concerns of possibly contributing to gambling addictions among young adults.   

What lies ahead for the U.S. sports betting landscape is a main focus of one of Variety Intelligence Platform’s latest white papers, “Sports Betting.” The white paper marks VIP’s third in-depth sports betting-focused examination that analyzes the impact of legalizing sports gambling and how media companies are capitalizing. 

Read the full special report