Why Gambling Operators Are Cashing in on the NBA
In May of 2018, the U.S Supreme Court ruled that the federal ban on state-sanctioned sports betting is unconstitutional. The decision allowed states to permit betting on professional and college sports, and some immediately did just that.
People have been playing poker on sites like PartyPoker for years, but legalized sports betting is something new. As more and more states are passing legislation to make it a reality and reap the tax revenues, another entity that is cashing in on this development are operators who can now take bets on events from all U.S leagues.
A New Market for Gambling Operators
Sports gambling has not just always been present, but according to the American Gaming Association, the black market sees $150 billion in bets placed each year. Different estimates put this number as high as $190 billion. These stats also say that 97% of these bets happen at illegal bookmakers or off-shore websites.
By legalizing the activity, allowing the ability to take bets on the NBA from U.S players, the door opens for gambling operators to gain access to a massive new market, and an entirely new revenue stream. A shift that most gamblers will gladly welcome as this means that they will no longer have to deal with unregulated, shady platforms that may not pay you if you win too much.
NBA’s Authorized Sports Betting Operators
The new norm appears to be a lucrative contract between a professional sports team or league, and a fantasy sports brand, prominent sportsbook, or a famous casino. These deals authorize the gambling company to use official NBA statistics and branding, on a non-exclusive basis across its digital sports betting and land-based offerings throughout North America. In return, the gambling company gets to have its brand promoted on the NBA’s digital assets, such as NBA.com, NBA TV, the NBA App, and on all NBA social media platforms.
MGM Resorts International became the first to partner with the NBA on a three-year deal worth $25 million. BetStars, was the second, while FanDuel Group was the third official gaming partner. DraftKings also signed a multi-year deal, as did theScore, Unibet, PointsBet, and the list keeps on growing.
The NBA Looks to Further Profit
On top of sponsorship deals, and the official partnerships, the NBA wants to move in and claim a larger slice of the growing sports-betting pie. It believes that it should get compensation for all bets placed on its games through a 0.25% integrity fee. A number slashed from the original 1%. It’s leading this charge, and Major League Baseball is following suit.
Basketball makes up a large chunk of the U.S. gambling market. In Las Vegas, where sports betting has been legal for years, basketball is responsible for 31% of all money bet on sports. Some say that it could produce close to $6.5 billion in casino revenue by 2023. Thus, the NBA thinks that it holds all the cards, but operators are refusing to budge for now.