American Gaming Association

AGA Projects Legalized Sports Betting to Bring $4.2B in New Revenue to US Leagues

The four largest United States-based pro sports organizations are likely to enjoy a combined $4.2 billion annually from the spread of legalized sports betting across much of the country, according to new research commissioned by the American Gaming Association (AGA) and conducted by The Nielsen Company, LLC’s Nielsen Sports division. The four leagues — the National Football League (NFL), Major League Baseball (MLB), the National Basketball Association (NBA), and the National Hockey League (NHL) — would gain from either the creation of new revenue streams or the expansion of existing streams as the overall impact of legalized sports betting brings an extra layer of consumer awareness and participation to America’s sporting world.

AGA LogoThe new findings come from a study commissioned by the American Gaming Association. According to the AGA, “Nielsen Sports conducted a custom survey of 1,032 U.S. 18+ adults, representative of census age, gender, geography and ethnicity, from May 15 through May 31, 2018.” Nielsen, a famed research name in the US due to its television-ratings history, is an independent measurement organization, though one of widespread renown in the field.

The AGA, of course, is the largest lobbying group representing the United States’ casino-entertainment industry, including dozens of casino groups and third-party service providers to the industry. The AGA represents the $261 billion U.S. casino industry and the estimated 1.8 million jobs nationwide the industry provides.

NFL Would Receive Largest Benefit

Of the four major sports organizations covered within the study, the National Football League would receive the largest overall benefit. The NFL is estimated to gain $2.3 billion in annual revenue as legalized sports wagering expands across the US. That’s more than half of the $4.2 billion total, with the AGA’s and Nielsen’s breakdowns per league as follows:

  • National Football League (NFL) — $2.3 billion
  • Major League Baseball (MLB) — $952 million
  • National Basketball Association (NBA) — $425 million
  • National Hockey League (NHL) — $216 million

The figures are combined from several categories but specifically do not include the controversial “integrity fees” lobbied for by the sports organizations on both the state and federal levels. The AGA is, overall, a staunch opponent of such fees, which the leagues have sought to have inserted into the text of legalization efforts — largely in failure to date.

The new revenue the leagues will likely enjoy can be split into two generalized categories, fan-engagement revenue and gaming-related revenue. The fan-engagement category, according to the study, includes revenue not incurred directly from betting operators, but rather as a result of increased consumption and engagement with the league and its content and products. These include such categories as media rights, sponsorships, merchandise, and ticket sales.

Then there’s the gaming-related revenue, which includes the fees paid directly from betting operators, in the form of sponsorship, advertising, and product fees. The latter could be construed to include voluntary data-rights deals such as that inked recently by the NBA and MGM, but not mandated “integrity fee” levies.

Research Sought to “Quantify” Typical Fans

According to the AGA and Nielsen, an attempt to quantify the potential spending behavior of likely-to-wager fans was a key component of the study. To do this quantification, “Nielsen Sports surveyed more than 1,000 adult sports fans – including NBA and MLB fans – and self-identified sports bettors nationwide to model how a national, legal sports betting market would affect the sports consumption habits of non-bettors, casual bettors and avid bettors, and how this change in consumption would translate to increased revenue.”

“The four major sports leagues will earn a collective $4.2 billion from widely available legal sports betting, further proving that working together with the gaming industry will pay dividends for all sports stakeholders,” said Sara Slane, senior vice president of public affairs for the American Gaming Association. “Legal sports betting will also create substantial opportunities for state and local economies, generating tax revenue, jobs and supporting small businesses across the country.”

A nine-page topline of the study that’s heavy on the visual aids and graphic representations is available here.

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