In most countries, sports teams now have an additional source of revenue thanks to online betting. While the early majority were satisfied to offer odds on the games they watched, today’s players want more. They want to be able to bet on their favourite teams and athletes.
Unfortunately, the majority of leagues around the world don’t share this wealth. They still operate under a ‘no betting’ policy. But that could soon change.
According to a report from the European Gaming and Betting Industry (EGBi), the global sports betting market was valued at US$16.9 billion in 2018 and is anticipated to rise to $26.2billion by 2023.
The industry is also seeing an increased number of countries legalise sports betting in the coming years – currently, there are 66 countries where it is legal to bet on sport, with more following suit.
With so much money to be made from placing bets on sports, it’s no wonder that many leagues and teams are taking the opportunity to try and benefit from the ‘new’ way of betting. Whether it’s trying to climb the football (soccer) ladder or joining a betting exchange, professional athletes and teams can now potentially make a massive amount of money without having to touch a ball. How cool is that?
New Revenue Stream For Teams
It’s fair to say that the introduction of online betting has changed the game for sports teams. Prior to this year’s NFL season, for example, it was virtually impossible for them to generate any meaningful revenue from gambling. American football is traditionally one of the most popular sports in the US and Canada, meaning that gamblers were more likely to wager on that sport compared to, say, cricket or rugby in other countries. This year, the Oakland Raiders are predicted to gain £19 million (approximately $26.5 million) from the GBP (Scottish Pound) – a record for any National Football League (NFL) team in a single season. This figure represents a 205% increase on their income from gaming in 2018. Similarly, the Brooklyn Nets are projected to earn £13million from esports betting this year.
As a result of this new revenue stream, sports are beginning to reinvent themselves. Some established leagues, such as the NFL, have moved towards a schedule packed with games and contests. This has enabled them to keep their audience interested while also providing additional sources of income. The most prominent examples of this are the US football leagues – for decades, the majority of their games were essentially meaningless contests. Thanks to some smart marketing and innovative bookmakers, the NFL is now one of the few sports leagues that can actually make a decent amount of money. The same can be said for the MLB (Major League Baseball), which saw its revenue rise by 11% in 2019, largely thanks to increased ‘traditional’ betting versus esports and other ‘non-traditional’ wagering methods. Finally, some leagues have taken a more ‘traditional’ approach, expanding to multiple cities and countries to create a genuine cross-border appeal. The International Cricket Council (ICC), the governing body for all cricket-related activities in the world, saw its revenue rise by 13% in value last year, largely thanks to the popularity of cricket in other parts of the world. Several major cricket events are now held in Asia, attracting more people to the sport and, therefore, more revenue.
It’s About More Than Just Money
While money is certainly a motivation, there are a number of other reasons why sports teams deserve to be given a slice of the industry’s growth. For one, it allows them to better understand their more immediate fan base. Thanks to the wealth generated from football betting, for example, the Jacksonville Jaguars are now able to identify the types of fans they have and don’t have, helping them to focus their marketing efforts on the right audience. This is also a great way to retain existing fans, as well as attract new ones, by offering them value and a good deal.
Other teams and leagues are also making the most of the new revenue stream, using it to reinvest in their clubs, increase team facilities and develop their young players. The Milwaukee Brewers, for example, are expected to gain $1.7million (approximately €2.05million) this year alone thanks to MLB betting. They will use this money to further develop their minor league system, with pitches, dugouts and bullpens all being upgraded due to increased revenue. The Minnesota Vikings saw their income rise by 68% last year, with the team using the money to further its youth development and marketing efforts, as well as increase security and improve facilities for its players.
It should be noted that not all teams are seeing the same level of success as others. The vast majority of NBA (National Basketball Association) teams, for example, still rely on ticket sales and corporate support to generate their revenue, with only the more profitable teams seeing a rise in income due to their involvement in gaming and esports betting. The same is true for the majority of the other major sports leagues, with the rise in income for sports teams largely coming from alternative sources of revenue.
More Attractives For Visitors
Attractives are one of the mainstays of a successful sports franchise. Having talented, famous and/or popular players brings in the crowds and makes fans interested in the team and its games. While money is still a key factor, sporting teams also need attractive teams and venues to make the most of their newfound fame. This brings us to one of the biggest issues for sports teams – the continued lack of investment in new stadiums and arenas. The majority of major sports teams still rely on outdated, often poorly-designed facilities built in the 1960s and 1970s. In the US, only 28% of team sports venues are considered “modern wonders”, according to a 2017 Sports Business Journal study. This issue was highlighted in a 2018 Forbes piece that ranked the world’s most expensive stadiums, with only four out of the 22 stadiums on the list being built within the last 10 years.
With so many established leagues and teams looking to make a good amount of money from the ‘new’ way of betting, the construction industry could see a massive boost – especially as several major sports events are now regularly held across multiple cities and countries, creating a genuine cross-border appeal. The 2021 NFL season is already anticipated to be the best in history, partly due to the impact that betting has had on the game. The Los Angeles Rams, for example, are predicted to earn $26million from wagering this year, a massive rise on their $11.5million income from gaming in 2019.
New Fans Engaged With Esports
As we’ve established, one of the main reasons why sports teams deserve a slice of the industry’s growth is due to the increased popularity of online betting and gaming. While it’s still relatively uncommon for people to place bets on sports due to the stigma that still surrounds the activity, more people are becoming interested in betting on esports. This is largely thanks to the ‘live’ aspect of esports – while gaming has largely moved to online environments, esports are all about bringing a live audience into the conversation, whether it’s between players or between gamers and casters.
This audience is now a target market for several major sports teams. The LA Lakers are one of the more traditional sports franchises to embrace esports betting, with them using their digital team, the Los Angeles Clippers, to engage with and grow their audience. Other teams have moved towards creating their own esports teams, with the New York Yankees and Seattle Mariners both launching official Overwatch teams in the past year. These teams are now a part of the popular spectator sport, with the Yankees’ team even having its own dedicated section at this year’s MLB (Major League Baseball) All-Star Game.
While it’s still early days, it appears that esports and other forms of online betting could transform the way we view sports going forward. The revenue generated from these activities means that professional teams can now potentially become household names, with the chance to attract significant investment – possibly even becoming entirely independent from football and baseball, with their own dedicated logos, jerseys, balls and facilities.