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AGA: NHL revenues could rise by $216 million a year as a result of legal sports gambling

Humberto Sanchez
Humberto Sanchez
Gaming
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Legal sports betting could boost National Hockey League revenues by $216 million a year because of spending from betting operators on advertising and revenue from increased consumption of the league’s media and products, according to a study commissioned by the American Gaming Association (AGA).

"Today’s announcement reaffirms that legal, regulated sports betting will create significant new revenue opportunities for sports leagues,” said Sara Slane, senior vice president of public affairs for the AGA. “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.”

The study comes after key House lawmakers, including Virginia Republican Bob Goodlatte, chairman of the House Judiciary Committee, and New York Democrat Jerrold Nadler, the panel’s top Democrat, said last week that Congress may need to act to protect children and consumers from online sports betting. Their comments came at a hearing convened on the issue.

Gaming industry advocates, including the AGA—which represents Nevada gaming companies, including Caesars Entertainment—have urged Congress to allow states to regulate themselves following the Supreme Court decision in May overturning the 1992 law banning sports gambling. Nevada gaming companies stand to gain from new business opportunities as more states decide to allow sports betting.

The AGA has argued that federal regulations could make it impossible for sports book operations to turn a profit because of notoriously thin margins, an issue they argue would prevent legal sports gambling from competing with illegal operations. They also point to Nevada as a successful model for regulating the industry.

But the nation’s top professional and amateur sports leagues, including the NHL, have urged Congress to act to prevent them from having to deal with different regulatory regimes across different states. Shortly after the ruling, NHL Commissioner Gary Bettman told CNBC that the federal government should establish a “one-size-fits-all sports betting solution that Congress passes" in order to avoid a group of states having different and varying regulatory systems.

Of the $216 million, $151 million would come from revenue derived as a result of increased consumption and engagement with the league and its content and products, including boosts in media rights, sponsorship merchandise and ticket sales.

The other $65 million would come from revenue paid directly from betting operators, in the form of sponsorship, advertising and product fees. That figure includes $35 million in sponsorship revenue from gambling services, $24 million in TV advertising revenue from gambling services and $6 million in data and product revenue for third-party gambling services.

The AGA commissioned Nielsen Sports to conduct the study. Nielsen surveyed more than 1,000 adult sports fans – including NHL fans – and self-identified sports bettors nationwide between May 15 and May 31, 2018 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.

The study comes after the AGA released another study last month which found that revenues for the National Football League could increase by $2.3 billion a year by 2020 as a result of legal sports gambling.

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