To call it a payday would be an understatement.
The American Gambling Association has released Nielsen Sports projections for the revenue implications of legalized sports betting on the NBA and MLB.
The projections indicate the two leagues will earn a combined $1.685 billion from the burgeoning sports betting industry.
More than that, the four major sports leagues combined will see a revenue boost in the billions from legal sports betting.
“The four major sports leagues will earn a collective $4.2 billion from widely available legal sports betting, further proving that working together with the gaming industry will pay dividends for all sports stakeholders,” said Sara Slane, AGA Senior Vice President of Public Affairs, in a press release.
“Legal sports betting will also create substantial opportunities for state and local economies, generating tax revenue, jobs and supporting small businesses across the country.”
Breaking down the MLB/NBA projected sports betting numbers
Nielsen Sports’ study says the MLB could earn up to $1.1 billion a year while the NBA could earn $585 million.
Nielsen’s methodology takes into account money the leagues gain from two sources: fan engagement and gaming-related revenue.
Their report provides the following definitions for those two revenue categories:
Fan engagement includes:
- Media rights
- Merchandise sales
- Ticket sales
Gaming-related revenue includes:
- Data and product revenue from third-parties
What the MLB will see from sports betting
Nielsen predicts that the MLB will earn $952 million from fan engagement and $154 million from gaming-related revenue.
The main source in the increase of revenue from fan engagement will come from ticket sales, Nielsen noted. They foresee a 12.2-percent increase in ticket sales in the post-PASPA world, from $3.661 billion to an estimated $4.109 billion.
Merchandise will account for the lowest rise in revenue. Nielsen predicts a 3.4-percent rise from $660 million to $683 million.
Keep in mind that the MLB season is about twice as long as the NBA season, resulting in a much higher predicted betting revenue than its roundball counterpart.
What the NBA will see from sports betting
The NBA’s projected yearly sports betting revenue increase is split between $425 million from fan engagement and $160 million from gaming-related revenue.
Unlike the MLB, whose fan engagement numbers are led by ticket sales, the NBA’s fan engagement revenue is led by a projected 8.1-percent jump in media rights, from $3.750 billion a year to $4.055 billion a year.
Nielsen indicates that sponsorships will account for a 4 percent increase in revenue, from $1.120 billion to $1.165 billion.
As for gaming-related revenue, Nielsen Sports predicts that the NBA will earn about half of its revenue jump from a $78 million increase in sponsorships from gambling services.
The AGA study and sports betting as a whole
The Nielsen Sports analysis projects sports betting revenue based on the opinions of “more than 1,000 adult sports fans.” Those include fans of the MLB, NBA, NFL, NHL, and other leagues.
Those surveyed included fans and sports bettors. From the data collected from those respondents, Nielsen extrapolated “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.”
Considering the fast growth of NJ online sports betting and the subsequent release of eight mobile sportsbooks in the Garden State, the revenue boost from a mature US sports betting market is entirely possible.