Categories: IndustrySports

AGA Says Sports Betting Will Add $1.7B in Revenue to NBA and MLB

Based on information gathered by Nielsen Sports, the American Gaming Association is reporting that the MLB and NBA are likely to enjoy a $1.7 billion increase in revenue as a result of legal sports betting. Altogether, the four major professional leagues are likely to see an increase of $4.2 billion in profits per year.

Sources of Revenue

The AGA report shows that the revenue will be both direct and indirect. Out of that $4.23 billion, the proceeds will be broken down as follows:

  • direct TV advertising revenue from gaming services, $596 million;
  • direct sponsorship revenue from gaming services, $267 million;
  • data and video revenue, $89 million; and
  • indirect revenue from media rights, sponsorships, merchandise, and ticket sales, $3.28 billion.

Although the leagues won’t receive money directly from the casinos, because that would create a conflict of interest, they will come from two main categories, gaming-related revenue and increase in revenue from fan engagement.

Gaming-related revenue will be monies collected from betting operators via product fees, sponsorships, and advertising. The remaining revenue will come from fans’ involvement via increased ticket sales and the sale of products and content.

Nielsen Sports surveyed over 1,000 participants over the age of 18, which provided them with the information to show that legal sports betting is sure to have a significant financial impact for all stakeholders.

In an article published by Legal Sports Report, the AGA’s senior VP of public affairs, Sara Slane made the following comments about how much the pro leagues could earn from sports betting:

“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. Legal sports betting will also create substantial opportunities for state and local economies, generating tax revenue, jobs and supporting small businesses across the country.”

Broken Down By Leagues

The NFL is likely to make the most money, simply due to the fact that it has the largest fan base. Altogether the National Football League will enjoy increased revenue in the amount of $2.3 billion. Around $1.8 billion of that will come from increased fan engagement and the remaining will come from gaming-related revenue.

Coming in second place is Major League Baseball with anticipated increase in revenue of $1.106 billion. $957 of that will come from increased fan engagement and $154 million will come from gaming-related profits.

The National Basketball Association will enjoy an extra $585 million, made up of $160 million from gaming-related revenue and $425 in increased fan engagement.

Last, the National Hockey League will enjoy an increase of $216 million in additional revenue. $151 million of that will come from additional fan engagement and $65 million of that will come from gaming-related revenue.

What About Integrity Fees?

The revenue from any integrity fees received from individual states is not included in these projections. Some states’ legislators have clearly said they have no intention of offering integrity fees, but others might not be totally against it. Representative Lou Lang, (D-Illinois, 16th District), is a strong supporter of legal sports gambling. At a recent hearing in Illinois, he testified:

“I don’t have a problem giving major league sports a fee, but I want them to give them a fee for something. Not a fee for nothing… I have proposed to them … that any fee they get ought to be in exchange for information we need – data, pictures, videos, demographic and marketing information… That would help us market sports betting in Illinois, and that would give us something for anything we might pay them. I don’t want to pay them for nothing.”

AGA members are against the idea of paying integrity fees. Since now they have the figures to back up the fact that the leagues will have extra revenue coming in as a result of legal sports betting, the AGA is even more steadfast in the belief that the leagues won’t need integrity fees.

Leagues Coming Around

Historically, the pro sports leagues have been against the idea of legal sports betting, but since the Supreme Court overturned the federal ban in May, they have to accept that this is their new reality. Legal sports gambling is spreading throughout the states; so far, Pennsylvania, West Virginia, Mississippi, Delaware, and New Jersey all have operational legal sports books. Several other states are gearing up to offer it within the coming months.

The American Gaming Association’s report means that the leagues might not be so opposed to the idea now that they’re seeing what kind of increased revenue they can possibly expect, not even counting the integrity fees that some states might impose that will further benefit the leagues.

Rick Rockwell

As a longtime freelance writer, avid sports fan, former athlete, and experienced sports bettor, Rick Rockwell has risen up the ranks at GamblingSites.org to become the self-professed "King of the Blog" in his first year with the site.

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