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Sports Then and Now

The Media Industry and Sports Gambling Services – What you need to know

Posted on May 11, 2019 by Abhinav Vasudevan

Do you prefer watching sports on Televisions or on streaming services? Chances are you belong to the majority of people who have opted out expensive cable subscriptions for cheaper streaming services which can be viewed on multiple devices. As ratings are decreasing and the cost of acquiring rights are increasing, it seems evident that the sports television industry is plummeting into a hopeless abyss. Is it really? Thanks to the Supreme Court, a 26-year-old federal law which prohibited sports betting in the United States have been scraped off which has infused a fresh air of optimism in the big media companies. With the new law in place, experts believe that it will boost the televised sports industry in a couple of years as sports betting gets legalised in most of the states.

Online gambling is increasing at a phenomenal rate every year. With more and more people spending millions in gambling from renowned online casinos like MonsterCasino, it is just a matter of time when media companies will jump on the bandwagon to have a piece of the cake. Brad Humphreys (a sports economist working at West Virginia University) said, “Hands down, it’s a huge deal.” He added, “How huge it depends upon how quickly states move and how many states move to legalize sports betting. For example, gamblers wagered around an impressive $20 billion by March 2017 in Britain despite the fact that the country has a population of just 65 million people and a less diverse sports industry. These revenues eventually find their way in the pockets of leagues, teams and sports media broadcasters. So, it is safe to say that the sports betting industry has a lot of potential and with gambling revenues hovering around  $150 billion annually, it is just a matter of time since big media companies jump on the same boat.

So. how can the media companies make money from sports betting? The most obvious reason would be to invest in ad revenue from sports bookmakers. Take an example of Warner Media’s Bleacher Report which struck a deal with the popular Las Vegas casino, Caesar to host a gambling show. In return, the casino has will buy several properties of Bleacher Report including ads and TV networks. But there’s a small catch. Most of the gambling operations in the United States now operate via offshore operations, so does that mean that the media companies will generate income from the illegal players also? Only time will tell how the authorities will handle this situation.

Another way by which the media companies can generate income through gambling is via affiliate marketing. Through this process, the media companies can earn money from every referral who visit the sportsbooks and casinos. This is the safest way to get into the gambling business where the media companies do not have to worry about liability issues like players suing companies by losing all money.

The third way to take advantage of this situation is to set up one’s own betting business where they can take bets and make payouts. This is exactly what happened with the UK satellite TV business, Sky which was later acquired by Comcast. It used to run its own betting business for 15 years and reports state that some US-based companies are planning on getting into this business pretty soon.

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