This is a guest contribution by Graham Shaw. If you would like to submit a contribution please contact Bill Beatty for submission details. Thank you.
The excitement following the landmark 2018 Supreme Court ruling which overturned the arbitrary ban on sports betting in the United States has yet to die down, but the truth is that it wasn’t the end of the story—just the end of the beginning. Almost a year on, despite the ensuing gold rush, there is still much to play out. While the sleeping giant is starting to stir, it may be a while before it properly roars…
50 markets, not one
The Supreme Court ruling began a process which will see every state legislate on sports betting in different ways. The end result will be 50 markets, not one.
This unique and extremely complex situation means betting businesses and media companies will need to tread carefully as they expand into the United States, as what is legal in one state may be an imprisonable offence in another.
I mention media companies here because they have an important part to play in how sports betting prospers in the United States. The data and information revolution driven by the legalisation of gambling will be just as dramatic as the legalisation itself. The United States will be making up for lost time—literally two decades during which sports betting around the world has become increasingly hard-wired to both data and media, creating a requirement for rapid adoption of the latest technologies.
The right route to success
We have already seen the first steps in this process with leagues like the NBA striking deals with companies such as SportRadar, Perform and Genius Sports to monetise their data, video rights and other assets.
The major media companies will approach this new market in one of two ways, either by doing deals direct with sports federations or by partnering with the major sports betting companies expanding into the U.S. market, effectively becoming super-affiliates. The scramble for market share means that prices for all content and data deals are likely to be inflated, at least until the initial dash to market dies down. Ditto for U.S. digital media assets looking to be acquired by betting companies hungry for audience.
There is also a third way to market. U.S. sports media brand theScore has announced its intention to launch its own sportsbook in New Jersey. It believes it has the reach and the brand awareness via web and app to build significant market share. A bold move and one which if successful will make it a hugely valuable asset, as well as being able to control its own destiny.
The betting companies which grow fastest are likely to be those with established platforms and money in the bank who pick the right media partners for their entry into the U.S. marketplace. Media properties who have live data content and are able to deeply integrate betting promotion are likely to be a big hit with American bettors and sportsbooks alike. Brands like LiveScore.com and Livesport Media have already proven this strategy to be a successful one on a global level. On the other side of the fence, online market leader bet365 has proven particularly adept at building the right affiliate partnerships to grow its business.
So far so good, but what about the elephant in the room? Namely those 50 different states with their often overtly complex approach to betting legislation and regulation. Some will go the whole hog to make betting fully accessible, while others will do the minimum required to comply with the Supreme Court ruling. For example, while New Jersey has been very liberal in its approach so far, New York has not.
The challenge of offering different betting products and features in different states is not insurmountable, although the cost of potentially needing to cater to 50 different regulatory regimes may put off some operators if they can’t see a route to profitability.
Game for anything
For U.S. pro sports and major college sports, the opportunities presented by the legalisation of gambling would appear to be huge—despite NCAA concerns about the effect it may have on integrity. Only a decade ago you would have been hard pressed for example to envisage the day the National Football League allowed a franchise to set up shop in Las Vegas. Yet here we are.
These leagues and governing bodies have incredible audience and fan bases already available to draw upon, and how they message potential bettors and engage them will be key.
Sky Bet have used Super6 with terrific impact in the United Kingdom for example to harness a major broadcast brand with betting in a really populist way. Simple and understandable to all, it has become a successful brand in its own right via strong promotion across all platforms. It keeps potential punters coming back week after week in huge volumes, and this type of concept could work equally well if activated alongside major U.S. sports.
Imagine for example Scott Hanson on NFL RedZone playing the Jeff Stelling role to hype up a similar game on each of the 17 NFL regular-season Sundays. Must-see TV allied with the ability for a massive audience to have an added interest right through to the gripping finale.
Sports not traditionally native to the U.S. are an interesting additional strand to this narrative. How big for example will soccer be in terms of market share? A global game yes, but not one which has been able to find a place at the very top table Stateside as yet.
Horses for courses?
It would be remiss not to mention the oldest betting sport of them all, horse racing. It appears to have been in decline in the U.S. for some time now (a story not dissimilar to the prevailing UK narrative in the past decade) and the pari-mutuel system has also proved something of a barrier to mass appeal. To quantify the huge challenge horse racing faces, betting turnover on the sport fell from $15.2 billion in 2003 to $10.6 billion in 2015.
If horse racing is to experience a resurgence, it won’t be off the back of any legalisation of fixed-odds betting alone. The sport will need to overcome its image as a tired and ageing brand to become something which again has real relevance on more than three or four days each year. The odds are stacked very much against a major renaissance but turning stagnation into some growth may be possible given the right product input from smart minds.
On message to succeed
As well as selling a positive story to offset the opposition to the legalisation of sports betting, a big challenge for operators and media properties alike will be finding contextual ways to make sports betting understandable and appealing to the masses.
A great example is Bill Simmons’ weekly ‘Guess the Lines’ podcast during NFL season with Cousin Sal. A favourite of mine for many years across several media brands from ESPN to The Ringer. It works because they are funny, they understand and love the topic and they discuss it in a way two friends would in a bar. It’s a conversation you would like to be a part of—the very essence of a successful podcast. Content where personality sells the subject matter perfectly, and one which should have significantly increased value thanks to the legalisation of sports betting.
Props: A special weapon
Another powerful weapon in the battle to make gambling simple and give it legs within the popular U.S. media market is props (specials in UK market terminology). They are already prevalent around massive events like the Super Bowl, but not so much yet on a day-to-day and week-to-week basis.
Props are a great way to take a story and give it a new and mainstream news line via betting, gaining publicity and traction at the same time. This tactic is not currently widely used yet in marketing activity in the U.S., but it is definitely growing, and the smartest exponents will enjoy major success as a result.
A wild (and fascinating) ride
In summary, the opening up of the U.S. market does represent huge opportunities for betting companies and media companies alike, but it’s a marketplace like no other and should be treated as such. The state-by-state approach will be a legal minefield and those opposed to the Supreme Court ruling will be watching and waiting for private operators to make mistakes.
The brands which thrive will be those who find the right partners and the right products and message to take to their potential audience. This is a new market which presents unique challenges. Some strategies employed in other territories will work, some won’t. Picking the right horse in each case will demand foresight, understanding and a large amount of analysis.
It promises to be a fascinating journey, so buckle up and enjoy the ride.
Graham Shaw is founder and co-director of Sport Acuity, an agency delivering high growth solutions for clients through specialist consultancy. Graham has worked at executive level for high-profile businesses both in the UK market and globally. He built Sportinglife.com into an affiliate powerhouse at Sky before heading up global editorial for Goal.com and acting as GM for Perform/DAZN’s multi-sports portals globally. Graham and his colleagues will be attending the Betting on Sports America 2019 show in New York from April 23 to 26.