MLB and NBA Could Make $1.7bn Annually from Sports Betting

Collage of players from several sports

The MLB and NBA could make almost $2bn (£1.5bn) combined each year from sports betting, according to a new study released by Nielson Sports.

The study estimates that Major League Baseball (MLB) could see a rise of $1.1bn (£.84bn) in annual revenues and the National Basketball Association (NBA) could gain more than $585m (£449m) each year. The American Gaming Association (AGA) commissioned the study.

The study looked at the new revenue streams that the leagues could create to take advantage of sports betting legalization. They include advertising revenue from sports betting operators, as well as sponsorships, reimbursement for the use of data, and increased popularity of league products and media.

Greater viewership and engagement is guaranteed by sports betting. Ticket sales, sponsorships, and money rights revenue would rise accordingly.

The AGA senior vice president of public affairs, Sara Slane, said: “The four major sports leagues will earn a collective $4.2 billion [£3.2bn] from widely available legal sports betting, further proving that working together with the gaming industry will pay dividends for all sports stakeholders.”

She went on to say that both local and state economies will be bolstered thanks to tax revenue, more jobs, and support for small businesses throughout the nation.

The estimates for the NHL and NFL had already been released. The NFL stands to gain $2.3bn (£1.77bn) annually and the NHL would gain $216m (£166m) each year through legalized sports betting.

What specific projections were there?

The study estimated that a further $160m (£123m) for the NBA and another $154m (£118m) for the MLB would come from data providers and betting operators. These operators would likely spend about $64m (£49m) for MLB advertising and $57m (£43.8m) for NBA advertising.

This, in turn, will increase the rights fees for the leagues. Another $78m (£59.9m) in sponsorship money would go to the NBA and $62m (£47.6m) to MLB. The NBA stands to gain $25m (£19.2m) and MLB $28m (£21.5) for data rights.

More than 1,000 adult sports fan were interviewed for the study, along with sports bettors from across the country. The interviewees were asked how sports betting legalization will affect different types of bettors and how they will consume sports in the future.

Are these figures likely?

It is interesting to see the U-turn that the sports leagues have taken since the federal ban was ended. They had fought tooth and nail to preserve the ban. They spent a lot of money lobbying politicians and they also filed a lawsuit.

Now they are trying to get some sort of compensation. Some of the leagues, most notably the NBA, MLB, and the PGA Tour were looking for integrity fees. They lobbied hard, but no state has yet included such fees in its final sports betting bill. New York debated the topic and looked as if might have these fees until the legislative session was adjourned for the year.

Kentucky is contemplating sports betting legalization in 2019 and will consider integrity fees. There is no major sports team in the state; that might change if Kentucky gets on the right side of the leagues.

A congressional hearing was held in late September. The major sports leagues were invited, and they expressed some of their concerns about sports betting legalization.

The chair of the hearing presented three options: introducing the sports betting ban once more, making individual states responsible for all regulation, or implementing federal standards.

The NFL proposed a few measures that they want to be implemented. They want a minimum age of 21 years old for sports betting. They also want a ban on in-play sports bets, and they want to charge gambling operators for the use of their official league data.

The NBA has already partnered with MGM to be the official gaming partner of the league. This will see their sportsbooks get exclusive access to key league data.

Gambling sponsorships are now allowed in the NFL and NHL. This is likely to become an increasing trend across all of the major sports.

Therefore, the forecasts from Nielsen Sports look as if they are possible and a profitable time is probably coming for the professional leagues.

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