How Does the NFL Make Money From Gambling?
Last season, a staggering 46.6 million American adults planned to wager a total of $16 billion on NFL games. That’s a big number for a league that has historically opposed to sports betting.
So how does the NFL make money from gambling with the recent explosion of sports betting in the United States? While the league doesn’t take a direct cut of betting proceeds, it’s cashing in through several indirect revenue streams.
A Little Context…..
For decades, sports betting was essentially outlawed in the U.S. outside of Nevada due to the Professional and Amateur Sports Protection Act of 1992 (PASPA). That all changed in 2018 when the Supreme Court struck down PASPA, opening the floodgates for states to legalize and regulate sports betting.
The tides changed quickly, with Americans legally wagering roughly $245 billion on sports since the 2018 ruling. Over that same period, the burgeoning sports gambling industry has generated around $15 billion in revenue.
How Does NFL Gambling Work?
So how does NFL gambling actually work? Most casual bettors place simple wagers like point spreads or moneyline bets on the outcome of a game. More advanced gamblers might bet on proposition bets (props) related to specific events like how many passing yards a quarterback will throw for.
Oddsmakers set point spreads and moneylines to create an equal number of bets on each side, with the sportsbooks making money by collecting a small commission (called the “vigorish” or “vig”) on losing bets.
Biggest Sports Betting Companies in America
The biggest sports betting companies include DraftKings, FanDuel, BetMGM, Caesars Sportsbook, and others. These giants have deep pockets and major marketing budgets.
1.Draft Kings – Market Cap: $21.6 billion
- DraftKings Inc. (NASDAQ:DKNG) provides services and products, including iGaming, sports betting, fantasy sports, and digital casino.
2.Wynn Resorts – Market cap: $11.46 billion
- Wynn Resorts, Limited (NASDAQ:WYNN) is a leading integrated casino company that offers betting and gambling services. The company owns the leading sports betting app WynnBET. The Wynn Race & Sports Book has three betting stations and various LEDs to provide its customers with the ultimate betting experience.
3.Ceasar’s Entertainment- Market Cap: $9.46 billion
- Caesars Entertainment, Inc. (NASDAQ:CZR) is an integrated casino company operating through its brands Caesars, Harrah’s, Horseshoe, and Eldorado. It offers traditional casino gaming, sports wagering, online gambling, and sports betting to its customers.
4.Churchill Downs Incorporated- Market Cap: $9.12 billion
- Churchill Downs Incorporated (NASDAQ:CHDN) biggest company assets is the Kentucky Derby. The company specializes in horse racing, racing bets, entertainment, casino gambling, and online wagering. Its subsidiary, TwinSpires, offers online horse racing betting.
5.Boyd Gaming – Market Cap: $6.45 billion
- Boyd Gaming Corporation (NYSE:BYD) operates 28 gaming and entertainment centers across 10 states. It also owns the sports betting app Boyd Sports, which offers online wagering, race wagering, and in-game wagering services.
Sponsorships and Advertising
You can’t watch an NFL broadcast without seeing ads festooned with promotional betting odds and sportsbook logos. Top betting companies collectively spent over $1 billion on advertising in 2022 alone.
Many sportsbooks have also inked lucrative sponsorship deals directly with NFL teams, like the Arizona Cardinals’ agreement with BetMGM and the Denver Broncos’ partnership with Betfred Sports.
Does the NFL Profit Off Gambling?
While the NFL doesn’t directly profit from betting activity, the rise of legalized sports gambling has been a jackpot for the league through several indirect revenue streams:
NFL Sports Betting Revenue Streams
- Increased Viewership – Research shows two-thirds of mobile sports bettors are more likely to watch a game they have active bets on. Last season, a whopping 81% of mobile bettors placed a wager on at least one NFL game. This engagement translates into higher TV ratings and viewership.
- More Advertising Dollars – With sports betting companies spending massively on ads and sponsorships, the NFL has a new river of advertising revenue flowing in from these deep-pocketed partners.
- Potential Data Deals – While the NFL hasn’t yet monetized its official data feeds, sportsbooks covet this data to set accurate live betting odds. Data partnerships could open up a significant new revenue source for the league.
Ownership Conflicts?
There’s been some controversy around NFL team owners also investing in gambling companies like Caesars, raising questions about conflicts of interest. However, the NFL has stated they are monitoring the situation closely.
Future of NFL Sports Betting
From just $3.5 billion in sports betting tax revenue across all states in 2018, projections see that number potentially reaching over $8 billion annually by 2025 as more states come online.
With massive mainstream companies like DraftKings and FanDuel leading the charge, the once-taboo notion of betting on football has gone totally mainstream. And the NFL is doing everything possible to get in on the action, even if they don’t directly collect from sportsbook winnings. How much higher can the league’s gambling windfall go?
