U.S. Betting Operators Begin To Re-Evaluate League, Team Partnerships

February 22, 2023
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U.S. sports-betting market leaders have begun to take different stances in pursuing partnerships with professional sports leagues and their teams that have been a common but expensive marketing tool in recent years.

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U.S. sports-betting market leaders have begun to take different stances in pursuing partnerships with professional sports leagues and their teams that have been a common but expensive marketing tool in recent years.

For much of 2019, hardly a day would go by without a new press release announcing the latest “official sports-betting partner” of a professional sports team in a market where sports betting had either already launched or would soon launch, or, as major sports leagues began to grow more comfortable with the concept of tie-ups, with the leagues themselves.

Team partnerships typically included physical and digital marketing space and in some cases a physical space in a stadium or arena for a branded sports-betting lounge.

Partnerships with North American sports leagues offered operators the right to use official team logos on sportsbook offerings, access to the league’s official data feed, and for some leagues, the right to advertise on national game broadcasts.

More than 180 team and league partnerships have been announced by betting companies since the U.S. Supreme Court overturned the Professional and Amateur Sports Protection Act in May 2018, according to VIXIO GamblingCompliance's U.S. Sports Betting Partnership Tracker.

DraftKings CEO Jason Robins, however, said that as the company looks to move toward its first profitable quarter by the end of 2023, some of these partnerships will likely be going by the wayside.

“We realize this is not an efficient part of the portfolio right now and we need to rework it,” Robins said during a fourth-quarter earnings call on Friday (February 17).

“We've had a number of partners that have been very constructive and have agreed to reductions that would make these deals efficient in a way that we need them to be.

“And there are others that we will be discontinuing when the deals come up and have discontinued as they've come up over the past year, so it's really been a mix,” Robins continued. “There's been a lot of really great partners, though, they recognized that the markets changed and have said, 'Look, we want the long term to be in business with DraftKings'.”

At an investor event in November, market leader FanDuel touted its own extensive portfolio of more than 20 publicly announced league, team, and media partnerships as a competitive advantage.

“We are confident that no one has a more diverse but also rigorous and disciplined thoughtful approach to who are the partners we need and how do we drive the most value out of them,” said Mike Raffensperger, FanDuel’s chief commercial officer.

Raffensperger said the league and team partnerships remained “a meaningful competitive barrier to entry and differentiator for FanDuel.”

“With many of these partnerships, there are only a certain amount of exclusive or semi-exclusive slots available to create them, so if you haven't had one or aren’t able to secure it, it is very hard then to break in at a later time,” he added, highlighting the National Football League’s (NFL) requirement to be some type of official league partner to be able to advertise on its game broadcasts.

The requirement to be an NFL partner last year created an opportunity for BetMGM, which began a partnership with NBC’s Sunday Night Football broadcast in 2022 after the previous rights holder, PointsBet, elected to end its official partner relationship with the NFL in favor of a more targeted advertising approach in local markets.

“That was a tactical purchase,” said Adam Greenblatt, CEO of BetMGM, during an investor call last month.

“We're pretty excited about the fact that the early exuberance in this industry, particularly in the area of media inventory, is abating somewhat, and we're kind of getting to the end of the first cycle of the early deals.

“And so coming to the end of that cycle means that there is new and fresh inventory coming back to the market, and oftentimes at interesting prices,” Greenblatt continued.

“The greater our flexibility, the extent to which we're able to allocate capital to the best ROI opportunity, that at any point in time is important to us, and so we try to as much as we can to stay flexible to make the most of these kinds of opportunistic situations.”

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