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Branching out: The evolution of data deals

Insight | Analysis

The leagues are now pursuing a twin track on data by also tying official data to marketing and sponsorship opportunities. Scott Longley explores the latest twist in the evolving relationship between US sports and the betting operators.

The significance of the deal signed in August between the NFL and data supplier Sportradar was hammered home by a survey undertaken on behalf of the American Gaming Association (AGA) and released at the start of September in time for the new football season.

The Sports Betting Consumer Study found that sports bettors in the US were overwhelmingly more likely to bet on the NFL than other sports, proving the extent to which it will be football wagering that will drive forward sports betting as a pastime in the US.

It underlines how football’s importance to the success of the operators can hardly be overstated: in terms of the marketing opportunities, the start of the football season is like having a soccer World Cup every year. The NFL as a product will be central to the operators’ chances of succeeding in any regulated state.

The data deal with the NFL was, therefore, always likely to take on extra significance. Following deals for data distribution for Major League Baseball (MLB), the National Basketball Association (NBA) and the National Hockey League (NHL), the NFL is the last of the major leagues to sign up to a deal.

But it is far more than just a missing piece of the puzzle. As far as the data landscape is concerned and the attendant arguments regarding mandates and royalty fees, the deal for the NFL was always destined to frame subsequent debates regarding official data.

As it stands, much of that debate has centered on the potential for the state legislators to embed within their sports betting proposals an official data mandate. This is the approach taken by Illinois, Tennessee and, depending on the decision from the regulator, Indiana.

As far as the leagues are concerned, a mandate for in-play wagers—an important distinction—is “essential for the creation of a safe, robust, legal sports betting market,” says Kenny Gersh, executive vice president for gaming and new business ventures at MLB.

“We believe every state wants to achieve those goals for their sports betting market and we are speaking to lawmakers and stakeholders to demonstrate why an official data requirement is an absolutely necessary step in the creation of the best possible and most lucrative sports betting market in any state.”

Parallel lines

Such is the official position. Yet the leagues are very much pursuing a twin track on data, and in the commercial arrangements announced to date they are also tying official data to marketing and sponsorship opportunities.

“For me, that is one of the very interesting additional layers that the US sports have brought to the market,” says David Lampitt, the global head of league partnerships at Sportradar, which now has data deals with all the major leagues. “MLB and the NBA started that, saying that we recognize there is a wider value for the sport as a marketing engine for these businesses, whether that is daily fantasy or now sports betting.”

The deals announced so far make the link between official data and sponsorship explicit. MGM signed a deal in August last year, soon after the PASPA repeal, for use of official NBA data which Adam Silver, NBA commissioner, said was due recognition that the sport should be “compensated for our… official data.”

MLB has also been busy. In August it added the Flutter-owned FanDuel to its official sports betting partner roster alongside MGM and FanDuel and Gersh says that more deals are in the offing.
Meanwhile, the NHL has also signed multiple official deals including partnerships with MGM and FanDuel (again) and William Hill. On the last, announced in March, Gary Bettman, NHL commissioner, said the deal was “yet another example of the innovative yet practical approach our League is taking with the emerging sports gaming industry.”

“We continue to work directly with stakeholders to cultivate relationships across the sports betting landscape,” he added at the time.

“Moves by the US leagues to enhance the value of their official data by attaching additional conditions to licensing deals is a logical commercial step,” says Jack Davison, chief commercial officer at Genius Sports Group. “They and operators alike recognize the value that official marketing relationships represent. League-sanctioned assets add legitimacy to a sportsbook’s name, amplify their brand appeal and elevate engagement levels, tangible benefits that add an extra incentive to work with leagues.”

Gersh agrees, suggesting that operators with official relationships with baseball, whether that is just taking the data or through sponsorship, will lead to increased take-up on the part of the consumers. To back up its argument, baseball commissioned a survey of consumers that showed that 62% of bettors are more likely to use a sportsbook if it partners with a league and that 80% of sports bettors said official league branding and partnerships were important when placing a bet.

The art of the deal

It is possible the commercial deals we have seen already—and those that are set to flow now with the NFL—will supersede any mandated data laws. Arguably, persuasion always looks better than coercion and comes with the added element of commercial good sense on both sides.

“The starting point for the leagues is they want to participate in the downstream opportunity that is driven by their sport, so even if there isn’t an established legal right, they feel there is a moral/ethical right to do that,” says Lampitt.

“Then it is about what is the best way to make that happen,” he adds. “We have seen various legal efforts to establish that and there have been regulatory ways of intervening in that, which have been led by an integrity angle rather than a commercial angle. But generally those approaches haven’t been successful in the international market.”

The leagues are almost certain to continue their efforts on the legislative front and are unlikely to be dissuaded from their viewpoint that by seeking mandated data they can secure the return they believe they are due from their data. Such is the view of Dan Spillane, senior vice president and assistant general counsel for the NBA, who had previously claimed that the organisation was happy with the state mandated wins because of the “precedent” it sets for legislators still debating sports betting.

Yet arguably the greater example comes from the way the commercial space is opening up. This demonstrates the willingness of the operators to make the regulated gaming space work for the states, the leagues and the consumer.

Sports data expert Angus McNab, previously an executive vice president for North America at Perform and now head of his own consultancy, McNab Sports, says demands from the leagues on mandated data are potentially acting as a block on innovation. In particular, he says that newer data capture techniques could open up a host of betting possibilities that would be more suited to US sports than to others internationally.

“Next-generation tracking data will be of much higher value in US sports—basketball, football and hockey in particular—as they have a far higher volume of substitutions and line changes, so player identification and who is on the court or the pitch becomes critical for creating many more prop bets.”

Yet for Lampitt, the key at this stage in the developing relationship between US sports and the betting operators is to understand quite how far they have already traveled in such a relatively short space of time.

“In the last 24 months the approach of all the US sports leagues has been transformed,” he says. “They recognize, one, they have a greenfield site and, two, the scale of the opportunity. But they also want to understand the market dynamics in order to work out the best way to enter that market in a sustainable and long-term way.”