One of the most meaningful media industry storylines from 2018 — with the most dramatic impact to come in 2019 and beyond — was the legalization of sports gambling on a state-by-state basis, which has implications for editorial strategy, product development, and — oh yes — revenue.
Interest in sports and consumption of sports media has always been driven, in part, by interest in gambling. Posting weekly predictions “against the spread,” March Madness “upset specials,” and cheeky, opaque references to over-under lines are a staple of coverage: A recognition that lots of people do it, even outside of Las Vegas sports books, but still taboo within the media industry. Too many editors remember the era of seamy 900 numbers and sketchy appeals like “Lucky’s Rock-Solid-Dead-Bolt Lock of the Week.”
The Supreme Court ruling last summer flipped the script almost overnight. Any stigma related to gambling has evaporated. New Jersey has become the new epicenter of sports gambling, with
nearly $1 billion in sports bets made since June. (The commuting lines between New Jersey and New York City have become a battleground for media buyers to make a statement.) Major sports leagues like the NBA, MLB, and NHL have signed nearly $100 million in partnership deals with MGM; individual teams will make their own deals; and concepts like “integrity fee” (payments from books to leagues) are part of a new reporting vocabulary. Data companies like Sportradar are the new Bloomberg. And media companies need to be poised to create new content strategies — and meaningful new revenue sources — that take advantage of this seismic shift.
Sports gambling coverage in 2019 touches every beat. It includes the politics of inevitable state referendums to legalize sports gambling; state licensing processes; city and municipality tax implications; the business of local bookmaking and creation of “IRL” betting locations; new jobs created by the industry; the essential need for sports departments to build in gambling coverage, in the same way most have created space for the proven consumer interest in fantasy sports advice.
Regional newspaper companies — struggling to hit numbers — are perhaps best-positioned to capitalize on gambling coverage as their states prepare to legalize. Ambitious young staffers can create their own successful (and potentially secure) career path by mapping out and pitching ownership of the “sports gambling” beat to top editors.
And the tectonic evolution of new industries always creates the opportunity for effective B2B media: If an industry trade publication using modern digital strategies — Skift for sports gambling — hasn’t been created already, expect several to launch in the year to come.
There will be meaningful revenue for media companies that connect their subscribers and passionate unsubscribed consumers to companies that want to be their gambling outlet — fierce competition among gambling providers will create opportunities for exclusive partnership fees, not to mention meaningful affiliate payments for every lead generated. In the same way media brands outsourced revenue for podcasts to middle-person ad networks, there will be a layer of companies created to help facilitate these lead-gen operations. (Should media companies try to maintain the direct relationship with its consumers, rather than ceding it to the gambling operators? Maybe! But the payments are a welcome alternative.)
Want a media company to track in 2019? Start with The Action Network. Backed by the Chernin Group, it brought in a new CEO with a winning track record in media and signed a headline star who can single-handedly drive mainstream traction for Action. (Disclosure: Both are my former colleagues.) To catch up, read
Ben Strauss’s deep dive for Slate.
This is not the “daily fantasy” bubble from a few years ago, when the two would-be market leaders bought up seemingly every available pixel of promotional space to battle for customer share. While media company sales teams accepted the easy and lucrative deals, most knew it was unsustainable beyond the boom of that quarter.
Legalized sports gambling is here to stay — the early returns are too jaw-dropping for every other state to intentionally exclude themselves — and will be a foundational component of the media industry for the next year…and the next era of journalism entirely.
If your company is trying to figure out how much to bet on sports gambling in 2019 and beyond, to borrow some industry jargon: “Take the over.”
Dan Shanoff helps companies create and execute content and programming strategies.
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