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Sports Betting Has Arrived to Transform the N.F.L. Or Not.

4th September, 07:17

Unlike other professional leagues, the N.F.L. isn't expecting a big bump from legalized gambling despite projections.

The N.F.L.'s centennial season begins Thursday, an anniversary the league has already begun celebrating.

Some observers believe that a true transformation of the sport's economics is only just starting now thanks to the advancing legalization of sports betting across the country. The Supreme Court last year struck down a law that had banned sports betting in most states, so when the Packers and Bears kick off in Chicago on Thursday night, football fans in 12 states will be able to partake in some form of legal sports gambling. Several more states have launches in the works.

But fans hoping that spread will radically reshape how they watch America's most popular betting sport will be left disappointed, at least for now. This year's N.F.L. will look a lot like last year's N.F.L., which looked like the previous year's N.F.L.

"We get great engagement, we don't need to integrate sports betting directly into that," said Christopher Halpin, the N.F.L. executive in charge of strategy. The television networks that show N.F.L. games seem to concur, likely in part because of the terms of their broadcast contracts.

N.F.L. television contracts have for decades prohibited announcers from talking about gambling, said Fred Gaudelli, the longtime producer of NBC's football telecasts, on a conference call last week. Sports betting references would be "somewhat isolated" this season he said, adding that NBC was beginning conversations with the N.F.L. "about what's possible going forward."

A Fox spokesman said there could be betting references on-air "if it makes sense and our announcers can organically work it in." An ESPN executive said there were "no plans to discuss gambling" on game telecasts and CBS executives were noncommittal. In other words, don't expect on-screen betting lines or announcers regularly discussing whether a late-game field goal helped a team cover the spread.

As NBC sportscaster Al Michaels put it last week, "Most people who have bet on the game don't have to be told what the point spread is."

Nor will fans be bombarded with commercials for sports betting, like they were with commercials for daily fantasy four years ago. "We wouldn't allow it to be jammed in their face," said Halpin, describing how the league would monitor ad loads and engage in "frequency capping."

Most states haven't yet passed laws or created regulatory structures in the 15 months since gambling was allowed to expand. The residents in states with legalized betting make up less than 20 percent of the U.S. population and its nascency means only a few places will allow fans to bet on their phones without first having to register at a casino. In New Jersey, the state with the most liberal mobile betting rules, roughly 80 percent of wagering is done through apps.

In New York, home (in name, at least) to three N.F.L. teams and the league office, bets can only be placed in-person at four upstate casinos. New York City residents can more easily drive to the FanDuel sports book at the Meadowlands in East Rutherford, N.J., if they want to take the over on how many games the Giants will win this season (the line is set at six).

Or they can take a PATH train to Hoboken and bet on their phone from the platform, or pull over on the New Jersey side of the George Washington Bridge (please don't actually do this).

The N.F.L.'s basic position is that it's still early for legalized sports betting and the league doesn't want to annoy the large portion of its audience that does not and will not bet. And with an enormous mass-market audience already, the N.F.L. contends it will benefit from legalization less than other sports. Consonant with that caution, the N.F.L. has far fewer betting-related deals than other American sports leagues.

Last month, the N.F.L. made its most consequential sports betting decision yet, expanding its partnership with Sportradar, a sports data company. Sportradar now has the exclusive right to sell official N.F.L. data to casinos and sports books worldwide. Carsten Koerl, the chief executive of Sportradar, called it "undoubtedly one of the most important partnerships in Sportradar's history."

Despite lobbying from sports leagues, only Tennessee and Illinois passed laws that mandate bookmakers buy and use official league data to determine certain wagers. But it can be harder to offer live, in-play wagers without it.

For the N.F.L., in-play betting could mean wagering on events as granular as whether the next play will be a run or a pass, bets that have to be made within seconds.

Though it is still rare in the United States, in-play is the dominant form of sports betting overseas. Bet365, one of the largest British bookmakers, said in 2015 that 80 percent of its revenue came from in-play betting, and most industry experts believe it will eventually make up at least half of U.S. sports betting.

Leagues have argued that in-play action should be based on numbers from providers with official data deals. Casinos in many states, including Nevada, have resisted the idea that states should require that sports books pay the leagues for data (or directly through royalties).

Sportradar can also sell nonpublic N.F.L. data from cameras installed in stadiums and sensors in players' shoulder pads. If sports books want to offer bets on how fast a running back will sprint on his next carry, they will have to buy that data feed from Sportradar.

"The quality of the data, the speed of the data and in some instances the data may allow us to offer prop bets that other people can't have," said Robin Chhabra, the chief executive of Fox Bet, a bookmaker created by a deal between Fox Sports and The Stars Group, which runs several gambling brands.

The tens of millions of dollars the N.F.L. is pocketing for its betting data is ultimately small change compared to the $15 billion in revenue it earned last year. How fast betting revenue grows for the leagues (and even the states that allow it) is up for debate.

Much of the potential depends upon which states legalize and how quickly, especially populous ones like California, Texas and Florida. The N.F.L. favors federal regulation to avoid this patchwork of state laws, but Congress doesn't appear motivated to act on sports betting anytime soon.

A report from the American Gaming Association and Nielsen -- who both stand to benefit as sports betting grows -- projects the N.F.L. to earn $2.3 billion annually from legal sports betting, and sports leagues in total could earn $4.2 billion. A quarter of that would come directly from betting operators, while the rest would be indirect revenue gained from increased fan interest.

The N.F.L. doesn't sound nearly as optimistic. Sports leagues with television audiences of hundreds of thousands of viewers, rather than the N.F.L.'s 15.8 million average viewers, "may see more uplift on that base for live consumption of their regular season games than I think we will," said Halpin. The league will experiment with sports betting in digital media and international markets, wary of disrupting domestic telecasts worth more than $7 billion in revenue for the N.F.L. this season.

"You can't even predict which states will legalize when and under what constructs, and what the U.S. sports book market will look like, or the advertising market," said Halpin, emphasizing the risk in acting rashly.

The N.F.L. might not emerge as the dominant sport of choice for bettors, either. In Nevada last year, betting on football (which included college football) accounted for just 34 percent of sports book revenues, with basketball making up 33 percent. The N.F.L. is also less popular outside the United States, somewhat confining its prospects when it comes to gambling.

All of which adds up to a modest reality. The country's most popular sports league, which fought sports betting for so long, is warming up to it, but it is doing so slowly.

More Sports Betting CoverageMove Over, Nevada: New Jersey Is the Sports Betting Capital of the CountryJune 29, 2019Will Sports Betting Transform How Games Are Watched, and Even Played?Jan. 29, 2019When Sports Betting Is Legal, the Value of Game Data SoarsJuly 2, 2018