The betting industry has invested almost $400m in sponsorship investments in US sport since the repeal of the Professional and Amateur Sports Protection Act (PASPA) in 2018, according to new research.
The research from GlobalData shows that some $396.6m has been transferred from betting operators to the five major sports leagues in less than three years.
Data taken from the GlobalData Sport Intelligence Center estimates that of the US$396.6m that betting brands are currently committing in sponsorship agreements towards the five major US sports leagues, 36.5% is channeled towards the NFL, 24.4% towards the NBA, 23% towards the MLB, 13% towards the NHL and 2.7% towards the MLS.
Liam Fox, sport analyst at GlobalData, said: “The growth of the sports betting industry in the US is by far exceeding the initial expectations for the market. On the one hand, cash-strapped state governments are attempting to balance huge budget deficits as a result of the devastating economic implications of Covid-19.
“In addition, the previous strong anti-gambling sentiments in US statehouses have been revised as many states have become more receptive towards expanding their sports betting offerings in a bid to collect more taxes from the lucrative revenue stream.”
The GlobalData figures illustrate US sport’s changing attitude towards betting, with the major leagues having opposed the legalisation of wagering for decades but now increasingly rely on the sector for valuable income.
MGM became the first gambling operator to partner with a major league when it signed with the National Basketball Association in August 2018 – three months after PASPA was repealed. Soon after, it added the NHL to its list of partners. In the more than two years since a host of leagues and teams have joined with betting and daily fantasy sports operators.
GlobalData said it believes the importance of the betting sector will grow further with sports rights holders missing out on valuable income from ticketing and hospitality due to the novel coronavirus (COVID-19) pandemic.
The NBA, which saw revenue fall by 10% to $8.3bn during the 2019/20 season, announced in November that it would be loosening the restrictions on its franchises to allow them to sell sponsorship inventory to casinos and sportsbooks, regardless of the state in which they reside.
“A loosening of restrictions regarding betting sponsorships has been identified as a mechanism to generate crucial commercial income to offset the revenue shortfalls elsewhere,” GlobalData said.