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Legalized US betting creates robust opportunity for sports marketing agencies

  • Agency involvement spans sponsorship and media advisory, event management and activation, and talent representation
  • Key lessons learned in Europe and elsewhere are being applied stateside
  • The patchwork of US state regulations creates a temporary hurdle

The US Supreme Court’s 2018 ruling allowing individual states to make their own rules regarding sports wagering created a frenzy of business activity around the nation.

Billions of dollars have been bet in early-participating US states. Dozens of deals have been struck between major sports properties, sportsbooks, and data providers. The entire sports sponsorship landscape has been historically altered with the opening of this major new category.

A less-discussed development has been the impact of legal sports betting on major sports and entertainment agencies. Whether it be in a sponsorship advisory context representing major betting brands as they gain league and team rights and activate, media rights management helping leagues oversee their data rights, or in a talent representation context for betting-focused media personalities, agencies are finding the arrival of widespread American betting represents a seismic shift to their businesses.

Or in the case of agencies such as Octagon, which owns and operates many of their own tennis events, it can also mean directly striking betting-related partnerships for themselves.

The agencies’ sponsorship advisory work additionally delves heavily into event activation, aiding clients such as MGM to be a fundamental part of industry jewel events such as Major League Baseball’s All-Star Game.

“We’re all over this from every which way this can be commercialized,” says Dan Cohen, Octagon’s senior-vice president and head of the agency’s global media rights consulting division. The firm’s clients include MGM, whose landmark 2018 agreement with the National Basketball Association was the first major sports deal in which a US league designated an official sports betting partner.

“We’re really still just at the tipping point of what betting is going to be in this country. Money is trying to get into the space from a variety of different ways, and there is not a league out there that isn’t trying to figure out their own sports betting strategy. There are going to be touchpoints everywhere. So there is lots for us to do and be a part of,” Cohen says.

Paris-based agency Lagardère Sports and Entertainment, which carries a sizable US presence and now in the process of a rebranding, has gone so far as to create a specialized sports betting practice within its operations.

“Betting as a category really gives us opportunities across our entire bandwidth, not just in the US, but really worldwide,” says Bob Brennfleck, Lagardère Sports senior vice-president of commercial, who oversees the unit.

National Basketball Association betting tips lay on a bettor’s booth at the Harrington Raceway and Casino on June 5, 2018 in Harrington, Delaware. Delaware was the first state to launch legal sports betting since the Supreme Court decision to lift a 25-year old federal ban. (Mark Makela/Getty Images)

Lessons learned

That agency, like several other prominent ones, is leaning on its existing international offices and relationships to help guide its activities in the US. Since sports wagering, and commercial deals around it, has been a fixture of sports in Europe for decades, it provides a handy roadmap to guide activities in America.

And the number one lesson learned about sports betting from outside the US, say the agencies? Watch for over-commercialization, as more is definitely not always better.

“What we certainly want to avoid in this space is over-saturation,” Brennfleck says. “The market can’t necessarily protect itself from itself. So you need governance along the way. And we need to have smart limitations and protections so that you know the right things to do and can protect yourself and help protect the industry. We have certainly seen the backlash when things have gone too far.”

Another major avenue in sports betting for agencies has been jersey sponsorship, which on a global stage still represents one of the most prominent and lucrative pieces of inventory in all of sports sponsorship. Industry giant CAA Sports, for example, recently helped Premier League club Manchester City with its training kit sponsorship deal with online gambling platform Marathonbet.

The deal is just one of several gambling-related pacts that CAA has done on behalf of property clients and will in part serve a template for future American opportunities.

Many more such deals, brokered in part by agencies, are expected stateside as Major League Soccer last year significantly loosened its restrictions around both jersey and stadium naming-rights sponsorships to allow sports betting, in addition to liquor brands, to participate. The move made them the first major US sports property to allow such deals.

“The legalization of sports betting and just the changing landscape of social mores…we felt that now was an appropriate time to make some adjustments,” said Carter Ladd, MLS vice president of business development.

It’s expected more US sports properties will follow the lead of MLS and allow sports betting brands into some of their most high-profile inventory, with agencies playing a key role.

“There is immense opportunity here in the US, and the world is seeing that the US is open for business in this area,” Brennfleck says. “And the interesting thing is that this is still really an immature market. We’re still just at the beginning of all this.”

(Ethan Miller/Getty Images)

Regulation hurdles 

Because the US is still in the early days of legal sports betting, there remains a disparate patchwork of state regulations, with different jurisdictions varying widely between fully legalized betting with an active mobile component to nothing at all, and everything in between. That situation presents something of a challenge for agencies to conduct their deal making in the space.

Many national and league-level deals are struck an omnibus basis with new states folded in after the fact as they come online with sports betting. But the state-by-state approach still creates many variances when it comes to local activations, particularly when it comes to event management.

“It’s basic math,” Brennfleck says. “There are some high-population states like California and Florida, states with a very high potential customer base, that haven’t come online yet [with gambling]. When they do, it will represent watershed moments, and help get us more to a point where it will truly look like a national marketplace.”

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