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Betting Sponsorship Deals Inject Over $396m to Major Leagues
By Jeff Osienya Feb 07, 2021 IndustryGlobalData research reveals that less than 3 years after SCOTUS repealed the PASPA, major sports leagues and their franchises have scored nearly $400 million from sponsorships with betting companies.Since the Supreme Court of the United States (SCOTUS) revoked the Professional and Amateur Sports Protection Act (PASPA) in May 2018, sports betting brands across the country have pumped in a total of $396.6 million to five major league professional sports.
The figure was arrived at after research was conducted by GlobalData’s Sport Intelligence Center for thirty months or rather two and a half years since the SCOTUS deemed PASPA inconsistent with the nation’s constitution.
The momentous change in federal gaming law has led to the rapid growth of US sports betting as states were given the mandate to legalize the activity as they saw fit. To date, 21 US states have already seen the launch of regulated sports betting in a bid to inject more revenue into their tax coffers and create more employment opportunities for locals.
States like New York which were initially against sports betting are also embracing the idea to deal with budget deficits caused by the impact of Covid-19 on the local economy. It is expected that by the end of this year, legal sports betting will be live in about half a dozen more states.
Major Sports Leagues Continue to Soften their Stance Against Betting
State coffers aside, professional sports leagues in the country have also won big from the rapid expansion of legal sports betting in the USA. Ironically, the same major US sports leagues were opposed to the PASPA repeal at first, arguing that such a move was likely to compromise the integrity of sports by encouraging vices like match-fixing.
But then after coming to terms with how much money is at stake for the leagues and their franchises, stakeholders are gradually warming up to the betting industry right from the collegiate level in some cases.
Furthermore, like the state economies, the major leagues were also dealt an economic blow with the pandemic as social distancing rules hurt gate receipts even after 2020’s sports hiatus ended. Thus, just like state economies once again, more major league franchises are also progressively welcoming betting sponsorships as a revenue stream to offset the losses they accrued from the pandemic crisis.
An excellent instance is of the NBA which announced in November 2020 that it would be relaxing the restrictions it had placed on its franchises after recording a 10% loss for its 2019-2020 season to bring in an $8.3 billion revenue. Upon slacking the restrictions, NBA franchises will be allowed to start putting sponsorship inventory up for sale to sportsbooks and casinos irrespective of the franchises’ state of origin.
The NFL Leads the Pack Taking Over a Third of the Sponsorships
Predictably, of the $396.6 million that major league sports collectively won from the betting brands over the 30 months, the National Football League (NFL) took 36.5% of the money. The Major League Basketball (NBA) followed the NFL after getting 24.4% of the money whereas 23% went to Major League Baseball (MLB) to finish off the top three.
The National Hockey League (NHL) came in as the third runners up after getting a 13% share and finally, Major League Soccer (MLS) wrapped up the lineup after collecting only 2.7% of the sponsorship revenue.
In light of GlobalData’s recent findings, Liam Fox, the organization’s sports analyst shared some sentiments about the numbers in relation to the pandemic and adoption of legal sports betting in the country. His statement read;
Quote“The growth of the sports betting industry in the US is by far exceeding the initial expectations for the market. On the one hand, cash-strapped state governments are attempting to balance huge budget deficits as a result of the devastating economic implications of COVID-19.
In addition, the previous strong anti-gambling sentiments in US statehouses have been revised as many states have become more receptive towards expanding their sports betting offerings in a bid to collect more taxes from the lucrative revenue stream.”
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