NFL Could See $2.3 Billion In Revenue From Legalized Betting

NFL Could See $2.3 Billion In Revenue From Legalized Betting

The United States is already projected to become the biggest betting market in the world, and it’s not just sports bettors and casinos poised to reap the financial fruits of legalized sports gambling in the US.

According to a Nielsen study released Wednesday, the NFL could see a whopping $2.3 billion in increased revenue annually, thanks to the American NFL betting market.

And that doesn’t even factor in the “integrity fees ” that leagues are seeking from the gaming industry, fees vehemently opposed both by both the businesses and the American Gaming Association (AGA), which commissioned the Nielsen study.

"Legal, regulated sports betting will create huge new revenue opportunities for sports leagues – and the NFL could be the biggest winner of all,” said Sara Slane, senior vice president of public affairs for the AGA, in a news release.

Increased Revenue Without Integrity Fees

A Nielsen study earlier this summer, also commissioned by the AGA, already projected a huge surge in NFL gambling with the legalization of sports betting in the United States, and with it a boon to online as well as brick-and-mortar casinos.

That increased engagement, in part, is at the heart of the new numbers in the latest Nielsen study, which features projections based on a survey of fans.

The study assumes there will be a huge boost in “fan engagement revenue,” including a 17.9 percent boost in annual media rights fees, plus increases in sponsorship, merchandise and ticket sales.

Overall, the study projects annual fan engagement revenue by consumption alone to jump 13.4 percent, from $13.1 billion a year to more than $14.8 billion a year.

New NFL Gambling Related Revenue

In addition to the fan engagement revenue, the Nielsen study projected a $573 million annual revenue stream to the NFL through television advertising ($451 million), sponsorship ($92 million) and data ($30 million).

In a memo sent to teams in July -- which was obtained by ESPN -- the NFL wanted to force casino brands that advertises with an NFL team to buy official league data, according ESPN reporter Darrell Rovell.

On that issue, the AGA isn't opposed to the idea of betting operators purchasing the official league data, it just doesn’t want it mandated, ESPN reported. The benefit of utilizing official NFL data is that in can increase the speed with which operators receive data from the field, essential for live in-game or in-play betting.

"So much time has been spent on talk over integrity fees," Slane said, according to ESPN. "We think these numbers are conservative and show that the league is frankly tripping over dollars to pick up pennies."

A Growing Marketplace

Since the Supreme Court nullified the Professional and Amateur Sports Act of 1992 earlier this year, thus allowing states to make their own sports gambling decisions, Delaware, New Jersey, West Virginia and Mississippi have opened up to sports gambling.

That represents just a tip of the iceberg, as a report from Gambling Compliance earlier this summer projected the market will rise to between $3.1 billion and $5.2 billion in total revenue by 2023.

James Kilsby, Managing Director for Americans for Gambling Compliance, said the U.S. market could quickly eclipse nations with much more established gambling traditions and even significantly larger populations.

Kilsby said the U.S. sports betting market could, in short time, surpass the U.K. and potentially China within five years.

Indeed, the Nielsen study from earlier this summer projected a 60 percent jump in NFL bettors in the United States with the legalization of sports gambling.