The sports betting market is already becoming crowded when it comes to editorial coverage. Many sports publishers, including Bleacher Report, ESPN and Sports Illustrated, have established sports betting content verticals over the years, and in 2017 the Chernin Group formed a new sports media company, The Action Network, dedicated to sports betting. But the action is no longer just coverage and publishers themselves enter the sports betting business, spurred by the Supreme Court overturning a ban on sports betting outside Nevada in May 2018 and legalising that business a month later by New Jersey.
Fox Sports and theScore each launched their own sports betting apps over the past week. Meanwhile, Barstool Sports has launched a standalone site, Barstool Bets, offering free-to-play contests with cash prizes instead of actual wagering, and Vox Media has launched a sports betting publication called DraftKings Nation with DraftKings.
For publishers such as theScore, entering the sports betting business is a logical extension of their sports betting coverage, which was a logical extension of their traditional sports coverage itself— and similar to fantasy sports. Of the four to five million people who use the flagship of theScore, non-betting app every month, approximately half of those people bet on sports, according to John Levy, CEO of thescore who cited the statistics from third-party research. A Score spokesman declined to share this research, including the company name that conducted the study and its methodology.
People would have been reading articles in the past or watching videos on the properties of these publishers that would inform the bets they make elsewhere. But as sports betting becomes more legal, publishers can close that gap — and turn it into a revenue stream on their own.
“Our whole philosophy is if we do it right and give people an opportunity to bet within theScore, they’re not going to go elsewhere,” said John Levy, CEO of theScore.
Moreover, as more people throughout the U.S. gain legal access to sports gambling, this is likely to increase the audience of people interested in articles and videos that will help them decide how to place their bets and that content might in turn help convert non-bettors into bettors. This motivates media companies not only to enter the sports betting industry, but also sports betting platforms such as DraftKings to enter the media industry. “The more engrossed and knowledgeable fans are within our industry, the more likely they are to participate, succeed and return to our products,” said Ezra Kucharz, Chief Business Officer of DraftKings in an emailed statement.
Sports publishers and sports betting platforms have reason to think that combining content and gambling can help increase and retain the audience. According to a survey published in November 2018 by the Seton Hall Sports Poll, 70% of people in the U.S. said they are more likely to watch a game if they bet on it.
These U.S. businesses are seizing a chance that their counterparts in the U.K, whose sports betting is of a more mature market, have been passed up. Sam Yardley, svp of consulting at WPP-owned sports marketing agency Two Circles “In the U.K., there was never really a move from the broadcasters to get into sports betting because it’s so heavily regulated.”
He continued: “That left control of the market to the betting operators, but without much differentiation among those companies, the betting operators have struggled with customer retention.”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.”
Placing various bets
Sports publishers take advantage of this chance in various respects. While Fox Sports and theScore have chosen to launch their own applications to allow individuals to place bets, Vox Media has chosen to produce a sports betting magazine with a business that has its own DraftKings sports betting app.
“Vox Media didn’t look to create its own sports betting app because of the extra work required to enter an industry outside of its core competency”, said Vox Media COO Trei Brundrett. “We think the fastest way to grab market share and to serve customers really well is to do what we’re both good at.”Vox Media is in the process of establishing an editorial team for the DraftKings Nation, which will include long-standing SB Nation editor David Fucillo, who will serve as editor for the NFL content of the DraftKings Nation.
Vox Media will create cash from DraftKings Nation by sharing income from the advertisements the two businesses are selling on the site with DraftKings. Given that DraftKings already sells advertisements, including branded games, on its own properties, the participation of DraftKing in ad sales could assist businesses overcome a potential obstacle in winning over non-endemic advertisers who may find it unpleasant to be linked with gambling that most countries have yet to legalise. “The brands that will get involved with direct buys around sports gambling will be fairly few and far between,” said Yardley.
While Yardley claimed that companies already in the sports betting industry are more likely to be direct advertisers, he acknowledged that other types of advertisers may be willing to advertise against sports betting content when buying ads on the open exchange programmatically because those advertisers are more concerned about the audience they want to reach than the context in which they reach them.
“TheScore is not concerning itself with using its foray into sports betting to grow its advertising business at the moment. TheScore Bet does not carry ads, and the publisher is still determining how it may use its foray into sports betting to grow its advertising business”, said John Levy, CEO of theScore. “We think [sports betting revenue] is going to dwarf the revenues that we could otherwise generate from the core app with our advertising revenues.”
The high hopes of Levy are not unfounded, given the gambling cash that already flows into New Jersey alone. From the beginning of 2019 until the end of July, according to the state’s Gaming Enforcement Division, individuals wagered $1.8 billion in internet sports betting in New Jersey. And in May 2019 alone, individuals in New Jersey are betting more cash on sports than in Nevada when it comes to offline sports betting.
Companies like theScore, produce income from their betting applications by getting a proportion of the cash individuals spend. Called the “net gaming revenue,” this proportion ranges from less than 5% to more than 12%, according to Levy, depending on the form of bet. Wagers involving various bets, such as parlays, and greater margins in-game games, he said.
However, it takes time and money to fight for that gambling income, as Brundrett suggested. Fox Sports has spent $236 million on investing in The Stars Group, a gaming firm that produced the Fox Bet app launched on September 1. A Score spokesman declined to tell how much cash the publisher spent developing its sports betting app that it constructed with Bet.works, a sports betting tech supplier.
There is the work needed to join the internet sports betting industry in relation to the economic expenses. Companies in the U.S. need to partner with an offline gaming provider to offer internet sports betting; theScore works with Monmouth Park Racetrack in New Jersey and Penn National Gaming to access 11 other countries that have legalised sports betting. After a deal has been concluded with an offline gaming provider, businesses must apply for gaming permits for each state they want to work in, which has been a month-long method for the Score. And all that is just about entering the sports betting industry, where publishers are facing entrenched players like DraftKings and FanDuel as well as casinos and other sportsbooks.
TheScore runs New Jersey television, radio and out – of-home advertisements to support theScore Bet but does not intend to “flood the market” with a marketing campaign to promote the app, Levy said. He refused to say how much money the publisher spends on advertising the app.
Instead, publishers such as theScore bet on their media characteristics that give them an advantage in attracting bettors to their applications. TheScore, for instance, has linked the betting app to its primary app. Within the main app, people can track wagers placed on theScore Bet with an option to allow live bet tracking, and some articles and videos in the main app include links to theScore Bet. “The experience we’re driving toward is a really a single experience,” said Levy.