This is the second of a two-part series examining the NCAA’s stance on sports betting and how best to manage it going forward. Click here for Part I, which reviews the NCAA’s position and its decision not to mandate injury reporting.
The NCAA last week announced that it will continue to oppose sports betting despite the fact that 10 states have some form of legal, live sports betting and eight more expect to offer it by early 2020. But whether or not the NCAA chooses to publicly embrace or co-exist with legal, state-regulated sports betting, the association has more opportunities to monetize in this new era.
So the question becomes what is the best way to monetize a business that some still view as unseemly, especially when many of the participating athletes are under 21?
Matthew Holt of U.S. Integrity, thinks the NCAA has already made the choice to embrace sports betting, or at least find ways to monetize it. Holt says his company works with about 100 big-time college athletics programs for integrity monitoring, but rather than seek the same sort of monitoring on an association-wide level, the NCAA instead has been partnered with the sports betting data company Genius Sports.
“It would appear that they are spending a lot more time trying to figure out how to monetize data than protect integrity,” Holt said.
“They should embrace sports betting, (after all) they are still a business. They should benefit from sports betting in whatever way is legal and available for them to do so.”
But what would that look like? Jennifer Roberts, the associate director of UNLV’s International Center for Gaming Regulation, says the visual piece of how the NCAA could monetize sports betting is tricky.
Betting logos on jerseys a bad look
“You have to think of the optics,” Roberts said. “If you have a lot of athletes who are under 21 and they are wearing a betting logo on their shirt, that might not look so good.”
Across the industry, professionals agree that sports betting or gambling logos on uniform jerseys or in arenas may not be the best way to go. Of course, that doesn’t mean it doesn’t happen — both the College Football Playoffs and March Madness are hosted in pro arenas, where billboards for beer and betting are prominently displayed. In fact, the 2020 CFP Final is set for the Superdome in New Orleans, and Final Four at Mercedes-Benz Stadium in Atlanta.
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In addition, the NCAA changed its policy earlier this year, allowing Las Vegas to be considered as a site for championships. The Pac-12 has long had ties to Las Vegas, which has hosted the conference’s basketball championship. T-Mobile Arena, which opened three years ago, will host the 2020 Pac-12 Men’s and Women’s Basketball Championships, and the conference announced in July that its football championship will be held at the Raiders’ new stadium in 2020 and 2021. The venue will also be home to the Las Vegas Bowl, beginning in 2020.
“It’s a challenge from a money perspective, but if you already look at the eyeballs that are on their product, there is a lot of interest,” said the American Gaming Association’s Vice President of Government Relations for Chris Cylke. “They’re in the same position we think the other sports leagues are in — there’s value to the product they put on the field, and having legal sports betting will create more opportunities for monetizing it. But I don’t expect they are going to do that with William Hill logos on their jerseys.”
But if the NCAA is going to try to make a buck — and why shouldn’t it? — off sports betting, what’s the best way to do so?
“They have a long history of partnerships with other companies that support their teams, like Nike or Under Armour, so perhaps partnering with a sports betting company isn’t so far out there,” said Becky Harris, former chairwoman of the Nevada Gaming Control Board and current sports betting fellow at UNLV’s International Center for Gaming Regulation.
Harris would like to see some of the NCAA’s proceeds from sports betting potentially go back to the athletes, and support Title IX or non-revenue sports.
Making money from data
Aside from developing an advertising or marketing campaign that prominently features gambling, another idea for how the NCAA could monetize sports betting is data. In both Tennessee and Illinois, new sports betting laws will require operators to purchase “official league data,” so that revenue stream is already in place.
While most industry professionals oppose the idea of an “integrity fee” or a mandate to use official data as a way for the professional leagues or the NCAA to make money from sports betting, they do understand that the NCAA, like the pro leagues, has a big opportunity to profit from the sale of data.
U.S. Integrity’s Holt believes monetizing sports betting would be simple for the NCAA.
“They do it like the NBA did it before PASPA fell,” he said. “They sell their data to a company like Sportradar and they can (turn around) and package it and sell it in different ways.”
Data deals can be worth hundreds of millions of dollars, and such a deal would allow the NCAA to benefit in a mainstream fashion without compromising the brand.
When it comes right down to it, no one in the industry is in any way opposed to the NCAA making money, it’s more a question of how to do it, and what the NCAA’s public position on sports betting will be in the longer run.
“I’d say, No. 1: Educate. No. 2: Cooperate. No. 3, if they’re interested, collaborate,” said UNLV’s Roberts. “Educate your parties, cooperate with regulators and operators so you have good information being shared, and if you want to collaborate with sports betting companies, they would be a way for a revenue stream.”
Sell more merchandise
Yet another potential revenue stream for colleges and the NCAA is fan engagement. Often a nebulous term, in this case, the idea would be for fan engagement to be converted into real dollars through increased ticket, concession or merchandise purchases. And, at a higher level, potentially more and bigger donations.
“We all know that people who have an investment in the game want to do more at the game,” said Brendan Bussmann, director of government affairs for the consulting firm Global Market Advisors. “Whether it’s buying more concessions or buying more merchandise. This is a hard thing to quantify, but (teams) make a lot of money.”
Bussmann says the NCAA has “run out of real estate” in terms of college stadiums having a set number of seats. Ideas for how to increase revenue despite having a limited number of seats are to hold back a set number of seats to an event, and then auction them off, or to include value-added experiences with certain seats and then charge a premium.
One source suggested that NCAA change its position from “opposed” to sports betting to “neutral.” In that circumstance, the NCAA would simply educate its players, coaches, athletes and administrators, but essentially stay quiet in terms of whether or not it supports sports betting.
Whatever the NCAA decides to do going forward, it will benefit financially from sports betting even by doing nothing. According to Nielson Sports, 35 percent of college football fans likely to bet on football — legal sports betting will only make the percentage rise, or at least cause those who do bet to bet more often.
The American Gaming Association looked at how legal sports betting would affect all of the professional sports leagues and projected that the NFL will gain about $1.8 billion in revenue from increased fan engagement — which along with selling more merchandise means fans will watch more games on TV, causing ratings to rise. That rise will translate into more dollars into the NFL’s pockets. It’s not a stretch to assume that college football viewership and engagement will also rise, creating additional revenue.
On balance, legal sports betting will translate into more revenue for the NCAA, be it through rising TV ratings or an increase in the value of television partnerships. At the core of it, legal sports betting means more interest in sports, and the most tangible measure of that interest is dollars and cents.