Brands Wager on Sports Betting Advertising
The proliferation of online sports betting could yield big opportunities in the U.S. market — for brands willing to take a chance
Last month, while Tom Brady was winning his record-setting seventh NFL Super Bowl title, another milestone was happening off the field. In their homes, sports fans were placing more than $400 million in bets on the contest between the Kansas City Chiefs and the Tampa Bay Buccaneers. That monster number — a record in its own right — is a sign of things to come in the American market. Sports betting is growing, and it is growing fast.
Since 2018 when the U.S. Supreme Court overturned its ban on sports betting, which had barred the activity in most states, 24 states have moved to legalize sports betting in some form, with many others planning to follow suit. Even with limited availability and differing restrictions state to state, Americans managed to spend nearly $35 billion on legitimate sports bets last year alone.
The enthusiasm for online wagering has financial analysts bullish on its prospects. As Yahoo! Finance reports, Morgan Stanley predicted that sports betting will generate $15 billion in revenue by 2025, and Macquarie Research believes that number could double by 2030.
That kind of rapid growth can be a tantalizing prospect for brands eager to cash in on a burgeoning market. And while some marketers may find it difficult to attach their brands to an activity once — or perhaps still — considered unseemly, for others, sports betting could be a sure thing.
Going for the Win
Way back in the bygone era of 2019, a presenter at the ANA/BAA Marketing Law Conference referred to gambling as a “sin industry.” The label speaks to the perception issues brands fear they may face by entering the market.
However, brands already closely associated with sports will find that’s not the case, argues Seth Jacobs, global co-head of CAA Brand Consulting, a marketing solutions provider with clients in the sports and entertainment markets. Jacobs points to Constellation Brands’ Modelo beer brand, which launched a partnership in the form of a contest with sports betting site DraftKings and former NFL star Jerome “The Bus” Bettis at the start of the 2020 NFL season.
In that contest, called the “Beat Bettis Challenge,” bettors were able to participate in a nine-week, free-to-play fantasy football series where they would select a team in the DraftKings app and compete against Bettis’s own team. Each week, the participants who were able to beat The Bus would split a prize pool of $5,000.
Jacobs believes this type of approach, which looks and feels more like fantasy sports than traditional betting, offers a needed departure from the stereotypical image of whispered bets placed with a shifty character in the back of a smokey room. “I think that Modelo example is one we’re seeing a lot of our brands consider and contemplate and investigate,” Jacobs says. “It is free to play and entry level. It feels a bit closer to fantasy sports than how you might think of sports betting in a casino.”
Betting on Content
Another potential brand entryway comes in a form many marketers have grown well-acquainted with over the past decade: content.
Since the cascade of states legalizing sports betting began, ESPN has leaned hard into producing articles and videos tying potential fan bets to its overall coverage of games across every league. In 2019, ESPN launched a wide-ranging deal with Caesars Entertainment that included opening a new content studio at the LINQ Hotel & Casino in Las Vegas, which serves as a home for all of ESPN’s odds-related content, and making Caesars the official odds data supplier across TV and digital platforms for ESPN Chalk, a content portal focused entirely on sports betting coverage.
In 2020, ESPN expanded that content arm by agreeing to a co-exclusive deal with Caesars and DraftKings that involves link integrations across digital platforms. Sports betting and the conversation that occurs around it is the driving force behind a new age of content for the sports media giant.
“There’s an expectation among fans that this is part of sports storytelling, part of the overall experience,” says Mike Morrison, VP of business development and innovation at ESPN. “It’s part of the excitement of the games, whether it’s odds or different potential outcomes or what actually happens versus what was predicted. More often than not, that is what is leading the story.”
The engagement numbers speak for themselves. According to Morrison, visitors engaging with ESPN Chalk content over the past year have generated 16 times the page views, 12 times the visits, 18 times the video starts, and a length-of-stay 20 times longer across the site overall than the average visitor who did not engage with Chalk content. With data points like that, it’s not hard to imagine a future where brands of all kinds begin to sponsor BuzzFeed-style content that fits neatly into the plethora of content already being offered by outlets like ESPN.
Setting the Odds
Presently, the sports betting market in the U.S. is still very much in the development stage. For how it might evolve, Jacobs points to Europe and takes a cautionary tone. Sports betting has been legal in the U.K. since 1960, but officials are now mulling a ban that would prevent betting brands from sponsoring professional sports leagues. Spanish officials are considering something similar, and Italy passed a sweeping ban of advertising in gambling in 2018. The American sports betting market will have to set precautionary measures to avoid a similar situation, Jacobs says.
“We need to be asking ourselves, ‘How can the leagues, teams, betting companies, media outlets, and everyone involved work together to set proper controls?’” Jacobs says. “We have to advocate for responsible gaming and acknowledge some of the extremes of excessive gaming.”
While it could be hard to convince brand marketers to make long-term investments in a space that remains uncertain, Morrison makes the point that times are changing. This is now a legal and regulated market, and its potential to drive business results is akin to a No. 1 overall draft pick.
“We don’t view this as unscrupulous or as something that has any of that aspect attached to it,” he says. “Any brand that wants to be associated with the sports betting space should view this as another way to engage fans and perhaps diversify their audience. It’s a growth area — and those are always very attractive.”
