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Howdy, partner: The proliferation of sports betting partnerships

Insight | Analysis

Partnerships between betting operators and leagues have rapidly spread across the US in the past three years. Cole Rush speaks to some of the brands that have aligned themselves with the leagues, and how they are using these to ramp up fan engagement – without affecting the experience of those that are not interested in wagering.

The pioneering phase of sports betting has culminated in nearly two dozen state markets taking their first bets. While more are inevitably on the way, operators, platform providers, and even sports leagues have learned the ropes, welcoming growth with open arms. 

Now, the opportunity lies in capitalizing on the massive opportunity to garner new audiences and continue legal betting’s exponential growth. 

While no operator’s path to success will be the exact same, there is one thing the industry at large seems to agree on: it’s easier to go together than it is to go alone. 

Official sports betting partnerships are flooding media feeds at a rapid clip, giving sportsbooks, leagues, data providers, and other industry movers and shakers a chance to join forces. 

It’s not just one-off partnerships being formed, either. It’s huge portfolios of extensive relationships aimed at benefitting sportsbooks, leagues, and everything in between. 

Take DraftKings, one of the sector’s market leaders. It has agreed an expansive range of deals, strengthening its presence in multiple states, says senior vice president of business development Michael Hermalyn.

“Currently, DraftKings is the official daily fantasy sports partner of the NFL, MLB, NASCAR, PGA Tour and UFC as well as an authorized gaming operator of the NBA and MLB, an official betting operator of the PGA TOUR, an official sports betting partner of the UFC and NFL,” he begins. “DraftKings also holds official relationships with the Colorado Rockies, Chicago Cubs, Charlotte Hornets, Detroit Pistons, Indiana Pacers, Philadelphia 76ers, Boston Celtics, Madison Square Garden (New York Knicks and New York Rangers), New England Patriots, New York Giants, Philadelphia Eagles, Nashville Predators, American Cornhole League, Major League Eating, and professional golfer Bryson DeChambeau.”

Try reading that in one breath. DraftKings isn’t an outlier, either. Major competitors in the sports betting world have similar partnership rosters at their disposal.

Adi Dhandhania, senior vice president, strategy and interactive at Bally’s Corporation, views partnerships slightly differently; as a brand challenging the established players it is building its tech stack and acquisition funnel through M&A. 

“Our entry into the sports betting and igaming space was marked by our November 2020 acquisition of Bet.Works’ proprietary technology stack, which will serve as the anchor asset of our interactive division,” he says. “We then acquired top-funnel assets, including Monkey Knife Fight, the third-largest daily fantasy sports platform in North America, and SportCaller, an award-winning, global free-to-play game provider. Most recently, we announced an agreement to purchase Gamesys Group plc, a London-based, leading, global online gaming operator.”

That builds out its online capabilities, and to that list Bally’s has added tie-ups with the NBA, MLB, and NHL for another strong line-up. 

Day to day a slew of partnership announcements come through, especially as new states join the sports betting fray. But what makes a good sports betting partnership, and how are operators and leagues benefiting from these relationships?

Forming strong bonds

Finding common ground is of the utmost importance when it comes to forming a strong, mutually beneficial sports betting partnership. Announcements of these relationships frequently touch on the basics, but there’s more to them than meets the eye.

Scott Warfield, vice president of gaming for the PGA Tour, says its events only make up a small percentage of states’ betting handle, though this will grow significantly in the coming five to ten years. It therefore has to be “proactive” in its approach to sports betting content. 

“We’ve partnered with Action Network, put odds integration on our website, and worked with PointsBet on a campaign around the Waste Management Open. For the PGA, partnerships are about entertaining fans and giving them new ways to participate.”

“We have five official betting operators,” continues Warfield. “DraftKings, FanDuel, pointsBet, BetMGM, and theScore. They’re some of the leaders in this space, and we’ve taken a pretty exhaustive approach to our partnerships.”

And the PGA isn’t alone in this approach. The NFL recently announced a tri-exclusive partnership deal with FanDuel, DraftKings, and Caesars. The latter closed on its acquisition of William Hill on April 22, 2021 and plans to rebrand to the sportsbooks as Caesars Sports.

The list goes on and on – the market is chock full of partnerships in the sports betting space, and there are a few key tenets that make for a solid arrangement. 

“Mutually beneficial sports betting partnerships occur when companies are able to align on a common vision and equip one another with complementary components,” says Dhandhania of Bally’s.

“In each of our partnerships, we believe in a win/win philosophy. We view that a rising tide lifts all boats, and that partnerships between industry participants benefit the industry as a whole. Given this, we have continued to be aggressive in partnering with multiple sports betting operators and diversifying our interactive offerings.”

For Michael Hermalyn of DraftKings, there’s a clear starting point for partnerships: “Being fan-first and reverse engineering a partnership from there. 

“Anyone can put together a sponsorship or negotiate for the best signage or hospitality but that is simply getting a deal done and does not touch on the truest elements of a ‘partnership’,” he says. 

“By centering around the fan and building up from there, a partnership can translate more deeply across fans with respect to customer engagement, and in that relationship between operator and club or league. From there, through aligned incentives and shared goals, we are able to identify what is a win for the club and what is a win for the operator, finding a middle ground and constantly adjusting along the way.” 

That middle ground, though, can encompass a wide variety of programs and agreements. Often, you’ll find “digital signage,” “social media content,” and similar summaries in partnership announcements. They’re marketing deals, and they stand to benefit operators and leagues simultaneously. 

Warfield of the PGA Tour adds: “First and foremost, [partnerships spark] engagement. It may sound like a conference buzzword, but it’s just reality for us. 

“When you have companies with huge platforms and audiences, they can be extraordinarily influential. They promote players. They offer an array of fun prop bets,” he says. “That’s great for the brand, it’s great for our partners, and it’s great for our sport. We’re all in growth mode, getting more people involved. Partnerships are an engagement play, so aligning with big companies in the sector is undeniably helpful.”

In essence, partnerships between leagues and sportsbook operators can amplify content’s reach, bringing sports betting to casual fans or prospective new bettors. Conversely, it can foster stronger fandoms among existing sports enthusiasts. 

All about the fans

Customers, fans, bettors, players – no matter what you call them, they’re the thread that binds operator partnership strategies. Striking these partnerships means better engagement with fans, more opportunities to educate new bettors, and heightened brand visibility in burgeoning markets. 

Fans across the country are hungry for sports betting content, making sports betting team-ups more lucrative than ever before. Bally’s Corporation takes it one step further, bringing fans content across as many channels as possible:

“While we have witnessed strong demand for sports betting, at Bally’s, our focus is on creating a variety of engaging content for sports fans and offering a diverse portfolio of interactive features that cover the consumer spectrum,” says Dhandhania. 

“With SportCaller, players can engage in our free-to-play platform, while Monkey Knife Fight offers real-money, fantasy sports contests. Additionally, where markets allow and consumers choose, sports fans can engage using our soon-to-launch ‘Bally Bet’ app. 

“The diversity of our operations and ability to adapt to consumer demand provides Bally’s with a significant competitive advantage.”

For DraftKings, the ongoing expansion of sports betting means more fans clamoring for content on a daily basis. 

Hermalyn says the operator has moved into 13 new states since its New Jersey launch in 2018, leading to a spike in demand for sports betting information as customers engage with the newly-legalized vertical. 

“By strategically partnering with a diverse group of organizations, both sides benefit from the latest statistics and season developments which allow for comprehensive coverage and related content for sports fans year-round.”

Right place, right time

But there’s a catch. Naturally, operators lean toward capturing the eye of existing and potential bettors. For leagues, this is still largely true. 

But there’s a tertiary consideration: fans who simply don’t want betting content. 

For every bettor, there’s a golf fan, a football fan, a diehard basketball fan just looking for a few hours of entertainment without the added frills that come with sports betting. It may be a small segment of a given audience, but it’s still an essential part of league strategies.

“When we’re talking about sports betting content at the PGA Tour, we ask ourselves: are there people this [sports betting content] isn’t for?” says Warfield.

“Absolutely. We’re trying to be purposeful and attentive to how we’re distributing betting content. The BetCast [a premium broadcast on Peacock in partnership with PointsBet and NBC Sports] was well done and targeted in its approach. The only people who found it were sports bettors seeking out that content. We don’t want to force the content on folks who don’t want it. 

“But we also know that blooming markets – look at Arizona and Maryland, for example – showcase how quickly sports betting can grow. We want to make sure we’ve tested and experimented so we know where the content resonates. We want to do it in a way that’s tasteful and consistent with what the PGA represents.”

Warfield mentioned Arizona, which could serve as a testing ground for new partnership initiatives as it gives sports venues a role traditionally played by brick-and-mortar casinos as a licensing partner. The PGA Tour, for example, has partnered DraftKings to construct a retail sportsbook at TPC Scottsdale, bringing sports betting opportunities to course visitors and players. 

Betting for the masses

Partnerships between leagues and operators bring new betting opportunities to a whole slew of prospective gamblers. For Warfield and the PGA Tour in particular, there’s an ancillary benefit: new betting types and formats. 

Consider the NFL or the NBA, where moneylines, point spreads, and totals dominate the ever-scrollable real estate on betting apps. For golf, those bet types don’t work. You’ll often find outright winner (or top five finisher) bets for a weekend golf tournament, but sports bettors want more. 

“We hear a lot from our partners that head-to-heads do well,” says Warfield. “The odds are better, it’s more relatable, and it’s easier to understand for casual bettors. You can also tell interesting stories around unique rivalries or match-ups on the course. There are also first-round leader bets, which don’t require a four-day wait to see if you’ve won. Then there’s hole-by-hole. Will DeChambeau birdie?”

Teaming up with an operator (or five) can provide crucial data that helps both sides tailor the sports betting content they offer to bettors. Golf also has a lot of opportunity for live betting, a sector Warfield says will only grow.

“In-play is the secret ingredient,” he says. Overseas that can be 75-80% of all bets. In the US it’s 30, 40, maybe 50% depending on the sport. But that’s where the industry is trending. Golf has a frankly huge amount of content, and the pace of play makes it a perfect contender for live betting. 

“Hit a shot, it takes five minutes to walk to your ball, three minutes to choose a club. You’ve got downtime that we can use to set lines for the next shot and provide really unique bets. Pair that with the coverage – four days per week, 7AM to 7PM – and that’s an excellent combination.”

Onward and upward

Sports betting partnerships are unlikely to slow down. And the convergence permeating the industry is a prime driver, lending these relationships a nice boost in velocity. 

Adi Dhandhania of Bally’s Corporaton says: “We believe that, similar to what we have seen in more mature sports betting markets, gaming and media will continue to converge in the US. 

“The future is about the gamification of sports. By bringing together professional sports leagues, media companies, and gaming operators, we hold the view that there is untapped potential and significant opportunity to develop unique fan engagement opportunities.”

Michael Hermalyn of DraftKings adds: “We are already seeing the virtuous synergies of these various partnerships. 

“There is a clear consolidation trend around sports gaming products and entertainment, so the future possibilities of multimedia networks are endless…Regardless of how these partnerships look in the years ahead, the limitless potential for impactful crossovers and bold collaborations is already palpable.”

Scott Warfield says the future can be shaped differently depending on the back-and-forth between operators and leagues. 

“Crystal balling the future of these partnerships is hard. For the PGA Tour, the focus remains on three things: aligning with brands that represent our sport the right way, forming a good partnership with constant dialogue, and finding a way to grow together. That’s where we stand as we look to the future.