While not exactly the first of its kind, the new partnership announced Tuesday between PointsBet Sportsbook and the University of Colorado Athletics program signals a seismic shift in the evolving relationship between collegiate athletics and legal sports betting.
The five-year corporate partnership, negotiated by CU Athletics’ commercial rights holder Learfield IMG College, is “one of the few in existence between a sports betting operator and a major NCAA Division I Athletics Program,” Colorado’s associate athletic director David Plati said in a statement.
“The University of Colorado’s new sports betting deal is the first among states that legalized sports wagering since 2018, and I expect many other similar partnerships to be announced before the end of the calendar year,” said Ryan Rodenberg, an associate professor at Florida State University. “What is unknown is whether the NCAA — as one of the five losers in the Supreme Court case — will do anything to prevent member schools like Colorado from entering into such deals.”
The sponsorship/partnership was first reported on Tuesday by Sportico and sent some heads swiveling — as it answers some questions about the trajectory of the NCAA’s relationship with legal sports wagering, but raises even more questions in both the short and long term. In the remainder of this article we explore some of the most compelling, and thorniest, legal, commercial, compliance and ethical issues that will come to light in the coming weeks and years.
Visibility: How about stadium signage and scope?
By way of background, Colorado voters narrowly approved the legalization of sports betting in CO by ballot referendum in November 2019, and in May 2020 the first sportsbooks launched in the state. Colorado has quickly become an attractive destination and testing ground for various operators and, well, for deals of this kind.
Complete deal points weren’t announced, but terms include “specific support for the athletic department’s Scripps Leadership and Career Development Program, which helps prepare student-athletes for success beyond their playing days.”
To the extent that students, athletes, professors, and boosters will be on or around campus this fall: What manifestations of this new agreement will they see?
“The deal will give PointsBet visibility at Folsom Field and the CU Events Center through game-day promotions and advertising space, as well as placement on radio broadcasts of CU games and other media channels,” the joint release from CU and PointsBet says.
Asked what the promotions/signage might look like, PointsBet Communications Director Patrick Eichner told Sport Handle:
- Football – field wraps, scoreboard signage, suite signage, etc.
- Basketball – courtside and concourse signage, video-board signage
- Assets across radio, digital, social, email marketing
- Hospitality for PointsBet customers/account holders/VIPs as well as employees
Yet it may be awhile before we see any of the promotions or signage in the flesh — the deal is just a few days old and the Pac-12 is one of two Power-5 conferences that announced in August that due to the COVID-19 pandemic, it was suspending all sporting competitions through the remainder of the calendar year. While promotions would likely come first, we’ll probably have to wait for the start of basketball season (if there is one at Colorado) to see signage.
But what will the NCAA think of the signage or promotions? It remains staunchly opposed (publicly) to sports betting, and has been lobbying for federal regulation. That said, the NCAA is an association, so unlike professional sports leagues where teams are seemingly bound to league policy, NCAA “member institutions” often make decisions on their own. As examples, legislators in many states found the NCAA’s position and those of local universities that supported sports betting at odds.
“What will some of the marketing connected around this partnership look like?” asked sports and gaming law attorney Steve Silver. “Will there be images or videos of Colorado athletes in commercials or signs? Historical game footage? How deep is this going to go?
“The NCAA has been pushing for, among other things, federal regulation, but that may not touch advertising. I’m curious if the NCAA will implement an institutional rule as to what schools can and cannot do with respect to marketing and advertising.”
Current PointBet marketing efforts have brand ambassador Allen Iverson, the former Philadelphia 76ers and Denver Nuggets Hall of Fame guard, sporting rain jackets, graduation caps, and other PointsBet gear.
☔Make It Rain☔ NCAAM Edition
— PointsBet Sportsbook (@PointsBetUSA) February 29, 2020
I doubt we will see Buffaloes athletes outfitted likewise, but, who knows?
“The NCAA has a long-standing policy against betting on college, or betting on any sport with the exception of horse racing and others like that, so nothing changes there,” Colorado athletic director Rick George said, per USA Today.
PointsBet has yet to go live online in Colorado, but that “will be a fast-follow to our upcoming Illinois launch,” Eichner said. The Australia-headquartered PointsBet, which is now operational in six U.S. jurisdictions including New Jersey, has close ties to Colorado — it recently began construction on its North American headquarters in downtown Denver.
The bookmaker has been making moves and market inroads fast and furiously, most recently inking a five-year partnership with NBCUniversal that designates PointsBet as the official sports betting partner of NBC Sports.
The economy, stupid
“I’m shocked. I’m not shocked that a school would want to do this — there’s a new category of advertising available with a lot of great companies spending money in a time of deep budget crises,” Silver said about the deal in general, “but literally two months ago athletic directors were telling Congress that legal sport betting represented an end of time. And for almost a decade the NCAA told federal courts at every level that expanding legalized sports betting would cause ‘irreparable harm.’ Now this deal involves a PAC-12 athletic department, a Power-5 school, not some random program.”
To the University of Colorado’s credit, it was pretty straightforward about its intentions and the impetus for taking this plunge. The school’s statement reads in part:
“The five-year deal provides a financial boost for CU Athletics during a time when athletic department budgets nationwide are stressed by the COVID-19 pandemic. The arrangement includes specific support for the department’s Scripps Leadership and Career Development Program, which helps prepare student-athletes for success beyond their playing days.”
“This isn’t a deal just to get PR, this is a long-term view for both parties, and both parties had to get very comfortable with one another,” Johnny Aitken, CEO of PointsBet’s U.S. business, told Sportico. “It is centered around education and those career pathways, and being in-state, the trust factor is heightened because we’re just miles away, not a plane flight away.”
They certainly earned loads of PR, in part due to the surprising nature of the deal and the historically oil-and-water relationship between sports betting and collegiate athletics in the U.S. It was only a little more than two years ago when New Jersey prevailed in the Supreme Court in Murphy v. NCAA — over the NCAA’s insistence about the evil of sports gambling.
“The deal is surprising because on the surface it appears like an about-face from a long-held position of the NCAA, which had also been attributed as a position of its members, but it also reflects a reality facing many colleges (and athletic departments), there are budget shortfalls all over,” John Holden, sports law professor at Oklahoma State University, told Sports Handle.
“Long before COVID-19, many states were cutting higher-ed budgets and schools were on a seemingly never-ending search for revenue sources to support themselves that did not involve raising tuition. COVID-19 has exacerbated budget issues in many places. Time will tell if other schools follow the University of Colorado’s lead here. Hopefully, the deal (and any future deals) include some meaningful money for creating programs to educate college athletes about gambling and potential risks they may face.”
How might the NCAA respond?
This is a pretty wide open question, but for starters, per USA Today, Colorado AD George “said he consulted with the NCAA and Pac-12 Conference about the deal beforehand and noted the presence of casino sponsorships in college sports.”
While some outlets identified the PointsBet-CU marriage as the first of its kind, bookmaker William Hill actually began multi-year partnerships with UNLV in the fall of 2017, and another with University of Nevada (Reno) in the fall of 2018.
Bottom line is that outside of Nevada, the Buffalo is now out of the bag.
“If this is the new normal, I would think almost every Power-5 school in a state where sports betting is legal is going to sign a similar deal,” said Silver. “Why would you not? How often does a gigantic new industry arise that’s totally untapped?
“Every athletic department is facing losses right now. At what point do financial difficulties make them open to this potential new revenue that just a few months ago they turned their noses up at?”
The NCAA has not yet publicly commented on the Colorado-PointsBet deal, or expressed any new policy position as a result.
As for the association’s own evolution on sports gambling — obviously it supported the establishment of the federal ban (PASPA) on full-fledged wagering outside Nevada, which lasted from 1992-2018. Then shortly after the Supreme Court ruled in May 2018, the NCAA suspended and then later rescinded its ban on the hosting of a championship event in a state permitting legal sports betting. Merely permitting it. Take a look at this policy pamphlet from 2010, in which the NCAA said that it opposed even “harmless, small-dollar bracket office pools” for NCAA basketball tournaments.
As for the NCAA’s own commercial dealings, it opened up its options in 2018 on the day PASPA was repealed, announcing a “data partnership” with sports betting data supplier Betgenius. The NCAA said at the time that the deal did not contemplate sports betting in any way.
MAJOR NEWS: @UNLVathletics Announces $5 Million Commitment From @BoydGaming. Largest corp. commitment in UNLV Athletics' history, will support new center-hung videoboard in @ThomasAndMack, help establish Student-Athlete Excellence Center, @UNLVSoftball facility upgrades #BEaREBEL pic.twitter.com/IWcXMsOz6G
— UNLV Athletics (@UNLVathletics) September 5, 2018
Will any other schools respond or protest?
There is no consensus about sports betting among member institutions of the NCAA, or within the conferences, or even from one building on campus to another. Everyone feels differently about it and whether or to what extent it poses integrity risks to athletic contests or the collegiate athletes competing.
In policy discussions on the state and federal levels, different schools and departments are saying diametrically opposed things. Consider this from a hearing before the U.S. Senate’s Judiciary Committee just six weeks ago. My colleague John Brennan recapped at the time:
Heather Lyke, director of athletics at the University of Pittsburgh, represented the NCAA’s position in opposing state-by-state legalization of sports betting on college contests (while acknowledging that “gambling on professional sports is here to stay”).
“The introduction of legal wagering on intercollegiate athletics will have a corrosive and detrimental impact on student-athletes and the general student body alike,” Lyke testified. “Gambling creates pressures and temptations that should not exist.”
For the most part, Lyke — testifying remotely from her office due to the COVID-19 pandemic — seemed somehow unaware of the extent of illegal wagering on major college sports for more than a half-century. Pennsylvania legalized sports betting in October 2017 and was the fifth state to allow operators to go live with legal sports betting in November 2018, six months after the fall of the Professional and Amateur Sports Protection Act.
So you can imagine how Lyke must have reacted when she caught wind of the PointsBet-Buffaloes pact.
Lyke is certainly not alone: In October 2019, Purdue University of the Big Ten Conference — located in Indiana where sports betting is now legal and massively popular — ratified a policy prohibiting anyone employed by or being educated at the university, including faculty, staff, students, and third-party contractors, from betting on games involving the school’s teams. Private schools Villanova and St. Joseph’s, both in Pennsylvania where sports betting is also now legal, enacted similar policies.
Elsewhere, “We supported the state bill around sports gaming, because we believe the integrity of our sports will be stronger now that it’s legal,” George at Colorado said this week. “We are partnering with PointsBet because we feel this partnership further increases the integrity of our game.”
The upshot is that it’s possible we could see schools refusing to schedule contests against others with divergent views on sports betting sponsorships that involve a university’s athletic program. Conferences may fracture based on these disputes, as not only individual schools but the greater conferences weigh partnerships. (Of course, conference alignments are already written in pencil.)
What does this mean for athlete sponsorship rights?
The fight for athletes’ rights has been heating up recently and in April an NCAA working group recommended that the organization allow its athletes to make money off their name, image and likeness (“NIL”).
“The athletic department is telling players they can’t wager, can’t be involved at all, and then the signage will be around the stadium and the CU Events Center?” Silver said. “How does that make sense? Are the athletes going to see any of the revenue generated?
“And as NIL rights have begun to expand, will athletes eventually have the ability to use their own names and likenesses in sportsbook sponsorships? If athletic departments can do so, why not the athletes?”
— Buffzone (@buffzone) October 19, 2016
Silver points out that the University of Colorado was also central to another major battle over athlete rights and NCAA amateurism: Bloom v. NCAA in 2004, in which former Buffaloes football player (return specialist) and Olympic skier Jeremy Bloom unsuccessfully fought for the ability to engage in endorsement deals, model, and pursue media opportunities to support his professional skiing career, while continuing to play at Colorado.
The court ruled in favor of the NCAA, which would not grant Bloom a waiver of its rules against those restrictions in the name of “amateurism.” It cost Bloom the final two years of his collegiate football career — as he pursued his Olympic dreams.
Here we are back in Colorado, times have changed, and Bloom’s course may have gone quite differently almost 20 years later.