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Sports betting operators across the country are racing to secure as much market share as possible, and it’s paying off for local television stations by way of new ad revenue.
Fifteen states have legal online sports betting operational. Seven others permit in-person sports betting. Five states additionally have full-scale internet casino gambling, with interactive slot machines and table games.
The major expansion of sports betting in the United States since the Supreme Court repealed the federal ban in May of 2018 has been a cash cow for local television markets.
Nielsen Ad Intel reports that sportsbook firms spent nearly $154 million in the first quarter of the year on local TV commercials. In Q1 of 2019, sportsbooks spent only $10.7 million on such spots.
Taboo until a 2018 Supreme Court verdict, online sports betting isn’t technically a new ad category. But with just over two years of a track record, few would challenge its advertising status as a golden goose, especially within the local TV industry,” a Nielsen release explained.
Nielsen Ad Intel is a leading provider of advertising information. Nielsen — its parent organization — is best known for providing audience ratings for television networks.
iGaming Proliferation
The American Gaming Association (AGA) reported this week that online gaming generated gross gaming revenue of $784.5 million between January through March 2021. That’s up 645 percent from Q1 2019, and 239 percent on the same three months last year.
Today, full-scale iGaming is only legal and operational in New Jersey, Pennsylvania, Michigan, West Virginia, and Delaware.
Mobile and retail sports betting revenue — money kept by oddsmakers after paying out winning bets — in the first quarter totaled $961.1 million. That’s a 451 percent surge in 2019 and a 270 percent premium in 2020.
Of the $153.6 million spent in the first quarter on local iGaming ads, Nielsen says FanDuel led the way by purchasing more than $57.7 million in spots. Rival DraftKings was a distant second at $43.6 million.
BetMGM spent $24.9 million, BetRivers $9.3 million, Betfair $6.7 million, and PokerStars $5.8 million. All other brands combined for $5.6 million.
Federal Regulations Amended
Prior to 2018, federal regulations barred television networks from accepting commercials advertising sports betting. The Supreme Court ruling resulted in the “big four” pro leagues in the US — the NFL, MLB, NBA, and NHL — warming up to legal sports wagering.
Nielsen reports that sports betting can create additional fan engagement, and provides a substantial opportunity for television stations and networks. While TV advertising revenue declined 9.5 percent from $84 billion in 2019 to $76 billion last year, sports betting and internet gambling ad spend skyrocketed.
“The overwhelming sea change across the sports and media industries with respect to betting ads highlights a significant growth opportunity for both local and national television. In 2020, online/digital sports betting-related ad spend increased across 180 of the 208 designated market areas that Nielsen monitors,” the Nielsen research concluded.
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