By Paul Bremer
The NFL, like all sports leagues, has capitalized on the evolution of legal sports betting in the United States. As America’s number one league for legal action, is it impossible to imagine the NFL taking the unprecedented step of participating actively in the action?
The NFL currently makes a lot of money from sports betting companies through advertising agreements. Their official “partners” are DraftKings, Fanduel and Caesars while Fox Bet, betMGM, Pointsbet and Wynnbet are approved sportsbook operators that can also buy ads. Some estimate that the NFL made $270 million in annual revenue from the category during the 2021 season. But wait, there’s more (literally)…
What could this structure look like? One straightforward idea is the league could make their own sportsbook and partner with an established book to run it, thereby ensuring that the book would run well from the get-go and take away almost any risk from the league. In this situation the league would take a cut (say 2%) of every bet, no matter the size. The annual yield would reach many multiples of the revenue derived from the current sportsbook deals once every state is legal. Additionally, the bidding war between the established sportsbooks to become the official fulfillment house for the NFL would result in a big number. This dramatic increase in revenue would be split up equally among all 32 teams, and more revenue for the owners means a higher salary cap. A higher salary cap means bigger contracts for players, potentially more roster spots and a better product for fans to watch on the field. Everyone wins. The NFL could also control all of the vital data and directly sell information like injury reports and advanced statistics for people to inform their bets. There is a lot of money in this area also.
This new structure would create a centralized trustworthy sportsbook for fans. For the NFL, marketing the sportsbook would be much easier than it is for the independent books that are currently spending their way into oblivion to acquire new customers. Since this hypothetical book would be the only place to legally bet on the NFL, many people would find it organically. Additionally, the NFL could bring awareness to its book via its owned platforms, teams and media partners at a fraction of the cost.
But the NFL sells broadcast rights, how is this different? Some people (without economics degrees) have suggested that the NFL should take control of all media rights and go direct to the consumer with their games. Frankly, there is just too much competition (cash) in this area, because everyone wants in and the NFL can cut up rights in multiple ways. For example, Amazon Prime Video is paying the NFL about $1 billion a year for exclusive rights to Thursday Night Football and all of the other major traditional broadcasters have rights also. This arrangement provides free promotion for the on-field product too. Many people don’t know this but the NFL event insists that their partners produce some of the programming on the NFL Network.
Sounds like a no brainer right? Let’s take a step back for a moment.
Currently, there are a bunch of different books and while most bets and odds are very similar across them, there are still some differences and a variety of lines. Would uniformity be more or less appealing to the betting public? What about needing separate licenses in each state For a league whose commissioner gets a police escort to the NFL Draft, is this really a high hurdle? The NFL only embraced the world of legal sports betting a couple of years ago, are they really ready to take this unprecedented step to revolutionize the industry? We talked to Mike Palm, Vice President of Operations at Circa Casino to see if this is feasible.
While these are important questions, the NFL is the most popular sports league in the country (for now) and therefore the league that has the best chance to beat everyone else to the punch and pull something like this off. The question is, will the NFL take this step? While mulling over our not so radical idea, the execs at the league should keep in mind that there is another league that is pretty popular and pretty progressive and has been ahead of the betting game before. We can’t imagine the NFL would want to be a fast follower instead of a clear leader but time will tell.
Photo Credit
Football Money: Scott Maxwell LuMaxArt
NFL DraftKings: Tada Images
Prime Video: Juan Ci
Goodell: Andrew Burton/Getty Images
