A number of publishers are partnering with sports betting businesses. These relationships open up new revenue opportunities and also give them exposure to a fast-growing industry.
Although a tricky area for many publishers to enter into, considering the ethical and religious issues around it, sports betting is being seen as a new opportunity to grow revenues as well as engage readers.
“Many media companies have identified a new pivot: sports wagering,” says Will Yakowicz, Staff Writer, Forbes. “Since the US Supreme Court struck down a ban on sports betting in 2018, 26 states and Washington, D.C. have launched legal markets and the industry is on fire and flush with cash.”
Americans bet $24B with legal sportsbooks in the first half of 2021, according to data from the American Gaming Association, which translates into roughly $2B in gross gaming revenue. By 2030, the industry is expected to produce $30B in revenues off an estimated $400B in total wagers, according to Macquarie Research.Will Yakowicz, Staff Writer, Forbes
“This is gold rush”
PointsBet, an Australian online sportsbook operator, has partnered with publisher Front Office Sports to launch a sports betting newsletter. The company launched in New Jersey, US in 2019 and has since expanded to 11 states. The objective behind the media partnership is to grow its presence in the US, reports Sara Fischer for Axios.
“Sportsbooks are looking for cheaper and more sustainable alternatives to accrue customers and engage them rather than spending millions of dollars on paid digital marketing,” she adds.
The newsletter will be created by Front Office Sports under the guidance of Teddy Greenstein, Senior Editor, PointsBet. It will be initially sent thrice a week to PointsBet’s approximately 1M free email subscribers. The company plans to later increase the frequency to five times a week.
“The deal marks a turning point for Front Office Sports,” adds Fischer. The publisher which has about 1M free email subscribers, has been generating revenue primarily by “selling sponsorships around its own content and newsletters, instead of licensing its tech to other companies.” It is profitable and is expected to generate $8M-$9M in revenue this year which is roughly double that of the previous year, CEO Adam White tells Axios.
This is an attempt by some of these sports betting companies to penetrate the US market by leveraging a source where they think they could find cheap users. Valuations for sportsbooks that have exposure to the US market are insane right now—they’re up and to the right. This is gold rush.Benjamin Black, Co-Head, Internet Equity Research, Deutsche Bank
“Contribute to our continued effort to diversify revenue”
Boston Globe Media has also announced that it will soon be launching a sports betting section on its site Boston.com in partnership with Better Collective, a global sports betting media group. “The section will provide our readers with content, data, and statistics for sports coverage and sports betting,” states a memo by the publisher’s Chief Commercial Officer, Kayvan Salmanpour and GM, Matt Karolian.
“This partnership will also allow us to monetize the section through sponsorship and a revenue share with Better Collective. This is the largest deal for Boston.com in recent history, and a reflection of the investment we have made in rebuilding and modernizing the entire site, better connecting it to our community.”
This partnership allows us to ink additional deals with sports betting operators to drive incremental revenue. It will also serve as a complement to Boston.com’s incredible journalism and will contribute to our continued effort to diversify revenue for the site beyond advertising.Kayvan Salmanpour and Matt Karolian, Boston Globe Media
“Better Collective already has successful partnerships with the Chicago Tribune, Philadelphia Inquirer, and NY Post in similar commercial arrangements with many more publications in their pipeline,” they add.
While these are the most recent deals between publishers and sports betting companies, such partnerships have become increasingly common in the last few years. Sports Illustrated, Barstool Sports, Fox, Gannett, The Associated Press, Vox Media, and Maxim, among others, entered into similar partnerships earlier.
A number of third-party vendors are also entering the fray and offering bespoke sports betting solutions for publishers. Indeed, whilst the rapidly growing interest in sports betting is a strong opportunity for publishers, it is often outside of their core content wheelhouse – spinning up new site sections places additional demands on already-taxed content, product, and development teams. STN Video, as one example, has launched a white-label sports betting solution designed as a plug-and-play solution.
Our goal with STN’s sports betting solution is to provide publishers with a turnkey site that enables them to begin quickly driving audience and generating revenue while leaving the heavy lifting of content acquisition, site development, and monetization to us.Grant Whitmore, Head of Strategic Partnerships, STN Video
“Smart ways to serve that readership”
AP, which partnered with sports betting company FanDuel last year, chose its sports betting strategy after learning that its readers wanted more betting-related content. “We have heard from dozens of customers over the last six months asking for more sports gambling stories on the wire and gambling info in our fixtures,” reads an internal memo shared by Forbes. “We know that a huge increase in interest in sports over the past two years has been due to the expansion of legal sports gambling, which will soon be available in more than half of the country. We’ll look for more smart ways to serve that readership.”
Other publishers interested in adding sports betting content to their offerings or partnering with such a business may benefit from following AP’s strategy. If the readers want it and the publisher can offer it (for example, if it already specializes in sports content) then it might be worth going ahead with.
Sports Illustrated, which is owned by Authentic Brands Group (ABG), and 888, a Gibraltar-based sports betting outfit, collaborated to launch SI Sportsbook in Colorado last year. 888’s objective is the same as PointsBet – to grow its business in the US. ABG on its part is looking at the partnership to “generate new revenue and relevance for the legacy brand.” writes Ashley Rodriguez, Media Editor, Business Insider. The company is “marshaling other extensions of SI, including the editorial arm operated by the Maven Group, to promote the sportsbook.”
The trick here is not to lose your core legacy consumers which consume editorial and creative content, but to add new things.Yaniv Sherman, SVP and Head of US, 888
“Major growth industry for the next 10 years”
“Broadcasters and publishers started taking ad dollars from gambling operators and dabbling in betting content a few years ago,” explains Ashley Rodriguez, Media Editor, Business Insider, “as the US regulatory tide turned in favor of the industry that had long been viewed as a vice. The ties between media outlets and gambling operators have deepened since.”
Sports betting is a vital and growing piece of US sports media.Ashley Rodriguez, Media Editor, Business Insider
These deals between media and gambling companies are mutually beneficial, according to Chad Beynon, an analyst at Macquarie. They offer exposure to a fast-growing industry as well as an opportunity to grow revenue.
“This is certainly a new avenue, a new stream for them to capitalize on in what will be in major growth industry for the next 10 years,” says Benyon. “And I think they’re very well positioned to be a part of the ecosystem.”
Gambling in itself is obviously a big money-maker, but gambling alongside content is where the direction of travel is going and where the huge opportunity is.Sam Yardley, EVP, Services & Products, Two Circles (Sports marketing agency)