First, it was a team in Las Vegas. Now its more than $200 million in sports revenue.
If the projections from a Nielsen sports study are accurate, the American Gaming Association announced this past week that the NHL could see a $216 million annual boost in revenue by virtue of legalized sports betting.
Sara Slane, the AGA’s senior vice president of public affairs, called sports betting’s impact on the NHL “significant.”
“Today’s announcement reaffirms that legal, regulated sports betting will create significant new revenue opportunities for sports leagues,” Slane said. “Much like the NHL’s recent successful expansion into Las Vegas, legal sports betting will continue to expand across the country, bringing with it a $216 million opportunity for the league.”
Where the NHL sports betting revenue will come from
Of the $216 million Nielsen says the NHL could earn every year from legalized sports betting, $151 million of that will come from increased fan engagement as well as another $65 million in revenue from gambling services.
According to a summary document from Nielsen, the consumption numbers (“fan engagement”) will result from revenue jumps in media rights, sponsorship, merchandise sales, and ticket sales.
Nielsen detailed the projected increases in each of those areas:
- Media rights: 4.3 percent, or $67 million
- Sponsorship: 2.0 percent, or $10 million
- Merchandise: 0.7 percent, or $1 million
- Ticket sales: 3.6 percent, or $72 million
Perhaps what is most significant in these numbers is that the projected increases in ticket sales and media rights are higher than what the league expects through gambling services.
Also of note is that an increase in ticket sales will be, according to the projections, the single most profitable revenue category in the post-PASPA world.
Those who gamble on games will, Nielsen predicts, be more inclined to buy tickets to those games.
Trio of factors with sports betting
Nielsen said the money the NHL is projected to earn from gambling services is split into three categories:
- TV advertising revenue: $24 million
- Sponsorship revenue: $35 million
- Data and product revenue: $6 million
These various categories, Nielsen said, are fees that gambling services will pay directly to the league. Obviously, NJ sports betting and online gambling would be a part of these streams.
Nielsen study included both bettors and non-bettors
The AGA’s summary of the Nielsen study detailed Nielsen’s methodology. In short, the company surveyed 1,000 sports fans. However, not all of those sports fans were NHL fans.
They used those 1,000 surveys to “model how a national, legal sports betting market would affect the sports consumption habits of non-bettors, casual bettors and avid bettors, and how this change in consumption would translate to increased revenue.”
So, while Nielsen extrapolated revenue pertaining to the NHL, it was by no means an NHL-specific study. In fact, Nielsen used the same numbers to project the revenue effect legalized sports betting would have on NFL revenue — $2.3 billion, to be exact.