The NFL’s Shifting Relationship to Sports Betting
It’s recently become crystal clear that the MLB and NBA support the legalization of sports betting. In fact, reports have confirmed that the two major American sports leagues have been lobbying across multiple states for weeks now. It seems the league’s lawyers have teamed up in their efforts to pass bills in as many as ten states. With the legalization of sports betting all but ensured at this point, many are wondering where the nation’s wealthiest sports league—the NFL—stands on the matter.
Well this past Wednesday, NFL Commissioner Roger Goodell spoke on the future of sports betting in the US during a press conference at the league’s owners meetings.
This is what the NFL’s Albert Breer had to say on the matter:
One area addressed at this week’s annual meeting: The looming legalization of sports gambling. Owners had an informational session based on a study the league ran, much of it focused on regulation, not monetization.
— Albert Breer (@AlbertBreer) March 27, 2018
The owners were presented with the findings of a previously secret study on gambling and the patterns of behavior associated with it. They received an update on technology and made sure the league is ready in case it is legalized. The year-long study was commissioned before the Supreme Court heard New Jersey’s case. Gambling, if legal, represents not only a possible added revenue stream but also another international fan base.
What Goodell said on sports betting
When asked about his meeting with league owners, in which he reportedly briefed owners on a recent league-run study about the impact of regulated sports betting, this is what Goodell had to say:
I don’t have any insight into what the Supreme Court is going to do and we’re not privy to that. I think what we did this week was make sure people understood how the prospects and potential for gambling can change, in part because of the Supreme Court decision, how it’s evolved on its own, beyond that. And this isn’t new work, we’ve been focused on this for several years, of how it’s affected the way we operate.
The No. 1 thing that was endorsed repeatedly by our membership was the integrity of our game though. We have to make sure that whatever environment we’re working in, and some of that may be related to what the Supreme Court decides, some of it might be future legislation, but we have to make sure we are operating in an environment where we can protect that integrity of the game. We recognize that we’re dealing in an environment here where we don’t know what the Supreme Court is going to do and we don’t know how other issues are going to evolve. But we wanted to make sure our clubs fully understood what we’re doing to make sure we’re prepared for that.
In the case that the Supreme Court does rule in favor of New Jersey, we’re likely to see a drastic shift in how the NFL approaches sports betting. So far, the league has not been involved in the NBA and MLB’s joint efforts to create tangible sports betting legislation on the state level. But, it appears—in the wake of the NFL Owners’ meeting—that Goodell and company are doing their best to prepare for the inevitable.
What would the NFL look like in a post-prohibition sports betting era?
The year is 2021. Patrick Mahomes and the Kansas City Chiefs have begun their march down the field against the Pittsburgh Steelers in the final minute of the AFC Championship Game. The ball is on the Chiefs’ 30 yard line. The Steelers are up by three. And you, along with 75,000 other screaming fans, are as close to the action as you’ve ever been—courtesy of the NFL’s newest betting app presented by Caesars.
You scroll down and see 3-to-1 odds on KC getting a field goal out of the possession, 5-2 odds that they’ll score a touchdown, and 3-2 odds they’ll end up turning the ball over.
You put $50 on the field goal. Then, you throw down $75 on 5-1 odds that Mahomes connects with Travis Kelce to score the game’s next points. And so you settle in, having bet $125 to win $600.
This is how the NFL sees the future.
And this past week, at the Ritz-Carlton Grande Lakes, the NFL formally began the process of ushering the perfect sport for gambling—football—out of the shadows and into the brave, new, modern world of legalized sports betting. Despite being largely mum on the New Jersey case, NFL Owners and team executives have been quietly looking forward to this for years now. It wasn’t until Monday, however, that the formal discussion began.
As Goodell said in his statements, any efforts made towards regulation and legalization are all baby steps for now. The gambling session, run by league EVP of business operations Eric Grubman, was to inform the owners on what’s out there, and what the NFL is doing to prepare for the new reality that just about everyone believes is inevitable.
“We’re so early on in this process. I don’t have a clear understanding as to where we’re going to go,” Giants co-owner John Mara said during a break the other day. “But we’re having discussions that we’ve never had before.”
“It’s a very complicated issue,” said Chiefs CEO Clark Hunt. “We don’t know what the supreme court is going to do. They could kick it back to the states, and that’ll create another process. One thing that was raised to us is you might have some state laws that conflict with federal laws, which will make it really complicated. What the league is trying to do in preparation for it is figure out how to maintain the integrity of the game, because that’s the most important thing on many, many fronts.
“And so they’re beginning their work on that. Obviously, there’s legalized betting that goes on in Europe in the Premier League, and other soccer leagues, so there are models they’re trying to learn from.”
Teams on the front lines
While owners are not unanimous in their feelings about legal sports gaming, some teams are already on the cutting edge.
Owners of the Tampa Bay Buccaneers and LA Rams, for example, have stakes in the Premier league teams, Manchester United and Arsenal, where in-game prop betting dominates the sports betting landscape.
In the NFL where hundreds of different outcomes are possible at every juncture of the game, traditional betting just doesn’t have the same value or appeal as live prop-betting. Especially in the modern world where information moves faster than light speed, where in-game highlight reels are available on YouTube immediately after a given play, the NFL has to be prepared to cater to a younger generation that both has a shorter attention span and more interest in to-the-second data streams.
Part of the NFL’s preparation for this eventuality must focus on tailoring the gaming experience to younger generations who are simply less willing to sit and watch a three-plus-hour game, with nothing else going on.
These discussions could not have come at a more appropriate time as the sports world holds its breath for a Supreme Court decision that could come as early as next week. The highest court in the land is expected by mid-year to in some way dismantle a 1992 federal law that banned sports books outside of Nevada. Doing so would bring an estimated $150 billion sports betting black market into the crosshairs of state coffers. It would also be a boon for a U.S. casino industry that’s in search of new winnings. So, with the SCOTUS expected to rule soon on the New Jersey case, the floodgates could blast wide open across the country. And the NFL, the nation’s wealthiest and most popular league, knows it has to be ready.
Adapting to Change
Currently, the league’s rules explicitly state that NFL teams can’t use the word “casino” in any deal, nor can they have a deal with any casino that has a sports book. This is because fears of integrity loss have dominated owners’ thinking for decades. With these rules in place, teams are not in a position to capitalize on the sports betting industry. Taking the rules off the books would create massive opportunities for teams, and proof, again, lies overseas with the soccer heavyweights of Europe who have partnered with online gambling companies and casinos.
What’s more, teams in the Premier League haven’t run into the integrity-of-the-game problems that have for decades scared NFL owners and teams from doing such deals.
The theme for this round of owners’ meetings was, as set by the commissioner’s office, The Game, The Fans, The Media. Clearly, the league understands that in order to remain a relevant powerhouse in the world of professional sports they must seek to modernize the gaming experience. From in-stadium to in-app to at-home, the NFL must find new ways to reach people who aren’t as quick to hop on the NFL’s bandwagon as they once might have been.
With that necessity becoming increasingly clear to a league of aging owners, legalized sports gambling could be coming along at just the right time. For too long, the NFL has had to stand on the sidelines while a massive black market sports betting industry has capitalized on their games. In fact, a big part of the NFL’s seismic popularity and success has been driven by illegal wagering.
Now it seems that could be coming to an end. And the NFL could have a powerful new lever to pull in the effort to push its business forward.