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Axios Sports

Sports betting stocks

Data: Investing.com, Yahoo Finance; Chart: Axios Visuals

The sports betting content frenzy is heating up, as operators continue looking for ways to own content — a far more efficient long-term vehicle for acquiring customers than traditional paid marketing.

Driving the news: Two weeks after acquiring sports betting network VSiN (Vegas Stats & Information Network) for ~$100 million, DraftKings has hired its first-ever chief media officer, Axios' Sara Fischer reports.

DraftKings has also talked about a potential deal with Action Network, the subscription sports betting publisher that lets users track their bets, two sources tell Axios.

I'm hearing a deal for Action Network could exceed $300 million — and that DraftKings isn't the only suitor.

Flashback: Last year, Penn National Gaming bought a 36% stake in Barstool Sports for $163 million in the hopes that Barstool's brand, audience and content expertise would give them a leg up.

Investors bought in, with Penn's stock up 628% over the past year, compared to 316% for DraftKings, 195% for MGM and 121% for Flutter (owner of FanDuel).

In related news ... ESPN will debut its first sports betting-focused NBA broadcast tonight (Nets vs. 76ers, 7pm ET). ESPN will carry the traditional telecast, while ESPN2 and ESPN+ will have an alternate presentation driven by sports betting content.

Sports betting media frenzy drives up stocks

ESPN will even debut its first sports betting-focused NBA broadcast Wednesday.

Sports betting

Shifts in technology and media are changing the way we play, watch and understand sports. Business models are adapting and social change is forcing those in charge of teams and leagues to reconsider decades-old practices.

Sports

For nearly a century, investing was driven exclusively by ticker symbols. Now, there's more room for passion-aligned investing — and sports is at the forefront of that movement.

The state of play: Sports fans have always followed the players and teams they love. Now, there are more ways than ever to actually invest in them.

Whether it's through sports betting, fantasy sports, or buying and selling trading cards and memorabilia, it's never been easier to bet on an athlete or team's future success.

With so much access to information, fans and collectors can form hypotheses and leverage their expertise by placing a "wager" on what they believe will happen.

Short-term: If you think Ja Morant, Jonas Valančiūnas and the Grizzlies will beat the Nuggets tonight, how do you invest in them? By placing a bet on the game.

Medium-term: If you think Valančiūnas will have a huge second half of the season, how do you invest in him? By picking him up off the waiver wire in your NBA fantasy league.

Long-term: If you think Morant is going to be a future Hall of Famer, how do you invest in him? By buying his rookie card (or fractional shares of it).

What they're saying: "Loving the things you invest your time and money into are so much more important now, and beloved athletes unlock that passion," says Rob Petrozzo, co-founder of Rally, a platform for buying and selling equity shares in collectibles.

"The old adage that '10–20% of your portfolio should include alternatives' has always meant real estate, precious metals and art."

"As assets like trading cards continue to dominate the conversation, I can envision 'sports' becoming a part of a lot of portfolios as opposed to just being part of an individual's collection or fond memories."

Consider this ... One Rally user I spoke with shared that he has a folder on his phone titled "Investing/Betting." Inside of that folder:

Go deeper: Read the full Axios Sports special report on the rise of sports fandom investing

The rise of sports fandom investing

it's never been easier to bet on an athlete or team's future success.

Economy & Business

Axios Media Trends

Casinos are investing millions on sports betting content to lure bettors to their online and in-person sportsbooks.

Why it matters: It’s a mini gold rush for some sports media companies that were struggling in the pandemic.

Amid the pandemic, audio has become a strong tool to engage consumers.

"The difference in audio and video is audio can live with you in a lot of different spaces as a consumer," says J.D. Crowley, the chief digital officer at audio giant Entercom. 

Driving the news: Wynn Resorts is the latest casino to invest in sports content, spending $3.5 million to build a dedicated studio at its Las Vegas resort in conjunction with sports podcast company Blue Wire.

How it works: Media companies make money by referring customers to sportsbooks, Axios sports editor Kendall Baker and I write.

Wynn Resorts' deal with Blue Wire is meant to help lure potential sports betters to the casino's online betting arm WynnBET. Blue Wire focuses on long-form sports narrative and conversational podcasts.

ESPN's sports betting analyst Doug Kezirian relocated to Las Vegas to host "Daily Wager" from ESPN’s new studio at The LINQ Hotel + Experience. Kezirian also hosts ESPN's "Behind the Bets" podcast from the venue.

VSIN, a sports betting network that produces audio and video content from its studios inside five U.S. sportsbooks, struck a deal last year to produce content at "the world's largest sportsbook" at Circa in Las Vegas.

Entercom launched a six-year audio partnership with FanDuel last year to co-produce audio betting content. The radio giant acquired the QL Gaming Group for $32 million last year, which includes the sports betting app BetQL.

Action Network, a subscription sports betting media company, works with several sportsbooks, many of whom sponsor its video and podcast products.

Media companies with their own branded sportsbooks, like Fox Bet and Yahoo Sports, use content integrations to keep fans hooked.

Penn National, a casino operator, kicked off this trend by investing $163 million in Barstool Sports last year.

Barstool produces hours of daily betting-centric audio and video. In 2020, the company launched its own branded sportsbook which Penn National says will be live in at least 10 states by year's end.

Be smart: "You're seeing a real lane for sport gaming-related content but it's not just transactional content, such as how lines are moving or what sides to take. Rather, it's entertainment content that revolves around personalities," says Crowley.

The bottom line: "It's a land grab for operators to acquire customers as more states go legal," says Action Network CEO Patrick Keane.

Casinos throw cash at sports betting media

Media companies with their own branded sportsbooks are looking to keep fans hooked.

Media

Casinos, internet gambling, sports betting and fantasy sports are all colliding with new, high-stakes partnerships, AP reports.

Why it matters: This expansion is leading Wall Street analysts to predict fast-growing revenue in the U.S. over the next five to 10 years. Morgan Stanley sees a $15 billion sports betting and internet gambling market by 2025.

Driving the news: Two casino companies announced deals this week with fantasy sports providers, according to AP.

Bally's acquired the daily fantasy sports company Monkey Knife Fight, and Caesars Entertainment announced a strategic investment in SuperDraft, a daily fantasy sports company.

Go deeper: The emerging media landscape for sports bettors

Casinos add fantasy sports in high-stakes partnerships

Analysts predict fast-growing revenues for sports and internet gambling over the next decade.

Betting lines at Race & Sports SuperBook at Westgate Las Vegas.

 Betting lines at Race & Sports SuperBook at Westgate Las Vegas. Photo: Ethan Miller/Getty Images

After watching New Jersey turn into America's new sports betting capital this fall, New York Gov. Andrew Cuomo is ready to embrace mobile betting as a way to generate much-needed revenue for the state amid the pandemic.

Driving the news: In a statement to the New York Daily News, Cuomo said he will make mobile sports betting a central part of his policy proposals to be laid out in next week's State of the State address.

"New York has the potential to be the largest sports wagering market in the United States, and by legalizing online sports betting we aim to keep millions of dollars in revenue here at home, which will only strengthen our ability to rebuild from the COVID-19 crisis."

Between the lines: Cuomo says he wants to run sports betting through the state lottery, as opposed to casinos. "I'm not here to make casinos a lot of money. I'm here to raise funds for the state," he said.

This approach has proved "disastrous" in places like Washington, D.C., which has struggled to generate revenue, writes Action Network's Darren Rovell.

"A lottery model means only one sportsbook would operate, leading to less competition, worse pricing for consumers and little to no innovation."

The backdrop: New York has been losing out on sports betting revenue for years, as residents travel across the border to place bets in New Jersey, turning the state's train stations into gambling hubs.

Wild stat No. 1: An estimated $837 million was bet in New Jersey by New Yorkers in 2019, accounting for roughly 20% of the Garden State's wagering.

Wild stat No. 2: New Jersey will approach $6 billion in handle for 2020 — and that's with no March Madness and a four-month sports outage. Once New York gets on board, it could do even bigger numbers — and fast.

Looking ahead: "New York, with a population of nearly 20 million, dwarfs any other state with legal betting and should have no problem regularly topping $1 billion a month in wagers," says industry analyst and former American Gaming Association official Sara Slane.

Cuomo embraces mobile sports betting to boost revenue crushed by pandemic

Cuomo said he'll make mobile sports betting a central part of his upcoming policy proposals.

Business

As the U.S. sports betting market matures, a robust media landscape is forming alongside it, with companies aiming to educate and entertain bettors.

The state of play: One of the early entrants is Vegas Stats & Information Network (VSiN), which launched in January 2017. VSiN has three studios in Las Vegas (South Point, Mandalay Bay, Circa), one in Atlantic City (Borgata) and one outside Chicago (Rivers).

Much like Bloomberg, Cheddar and other financial news networks that broadcast from the floor of the New York Stock Exchange, VSiN produces upward of 16 hours of daily programming from inside major sportsbooks.

Circa opened two weeks ago with the "world's largest sportsbook," and VSiN has a studio inside (see below).

"The sports betting world pays attention to the numbers Circa releases, and we're right there, creating content from a place that helps open the market," says CEO Brian Musburger, who recruited his uncle and longtime sportscaster, Brent, to leave ESPN and join VSiN nearly four years ago.

The big picture: Sports betting media can take on many different forms, from your standard handicapping show to more educational or comedic offerings.

Informative: This is VSiN's niche. "Early on we wanted credibility with hard core sports bettors, but now as the market matures we've also recognized there's a need for more 'sports betting 101' content," says Musburger.

Entertaining: Think Barstool, whose personalities don't profess to be experts, but their audience doesn't care. For them, it's about (virtually) sitting on the couch with friends, making bets and having a good time.

Mainstream: When you think of a mainstream sports betting program, perhaps you're envisioning a "SportsCenter"-style show with a betting tilt. That's essentially what ESPN's "Daily Wager" is, and "Fox Bet Live" is similar.

What to watch: Sports betting programming was once considered taboo for TV networks. Now, it's table stakes for survival and a new way to keep fans engaged.

Some networks will create their own programming, while others will pay companies like VSiN to produce shows for them (MSG+ already does this).

Meanwhile, digital outlets are creating their own content and earning affiliate revenue from sportsbooks by sending them potential customers.

Go deeper: The thriving offshore betting market

The emerging media landscape for sports bettors

Several companies are aiming to educate and entertain bettors.

Al Bernstein (left) and Brent Musburger unveil VSiN's first studio in 2017. 

Al Bernstein (left) and Brent Musburger unveil VSiN's first studio in 2017. Photo: Ethan Miller/Getty Images

All North American sports leagues face enormous uncertainty heading into 2021, but the NHL's reliance on ticket sales and cross-border travel puts it in a particularly tough spot.

The state of play: While leagues like the NBA and NFL make most of their revenue from media rights, the NHL is a much more gate-driven league.

This means playing in empty arenas could cripple the bottom line — so much so that a few owners have suggested that the league might be better off financially if it shuts down next season, according to ESPN.

Commissioner Gary Bettman reportedly shut that idea down, but it gives a sense of the stress the NHL is under.

Start date: The NHL and NHLPA announced on Oct. 6 that they've shifted their target date to Jan. 1, 2021, after initially targeting Dec. 1. Bettman made it clear to me in our interview last month that they won't rush this decision.

Canadian border: The Canadian border was closed for nonessential travel this summer, and the situation hasn't changed all that much. One potential solution: an All-Canada Division featuring the NHL's seven Canada-based teams.

Season length: We almost certainly won't see a full slate. That could mean upward of 65 games or as few as 48, which is considered the absolute minimum, per ESPN.

Paychecks: Thanks to an agreement the NHL and NHLPA made this summer, most players have already received 8.1% of their 2020-21 salaries.

The impact of the third wave: NHL 2021

NHL's reliance on ticket sales and cross-border travel puts it in a tough spot entering 2021.

NFL, NBA, MLB & NHL

While legal wagers on the election aren't offered through U.S. sportsbooks, betting operators have launched free contests to drive sign ups and engagement.

Driving the news: DraftKings' $100,000 pool has attracted nearly 400,000 entries, and those who pick the winner overall and in 11 states have a chance to win.

FanDuel's "Bet The Ballot" contest asks, "Who will win the U.S. presidency? (Joe Biden: -175; Donald Trump, +138)," plus other questions like, "Will Trump win at least one state Hillary Clinton won in 2016?"

Meanwhile in Europe, it's legal to bet on the U.S. presidential election, and more than $1 billion is expected to be wagered, according to British betting firm GVC.

England-based Betfair has already seen $369 million worth of bets, with 50.6% of the money bet on Biden as of 3pm ET on Monday.

Action has also caught fire at offshore sportsbooks like Betonline.ag, which says the election has surpassed the Super Bowl in terms of dollars bet.

What to watch: Sports betting is on the ballot in three states: Maryland, Louisiana and South Dakota.

Betting operators target outcomes of 2020 election

Sports betting is also on the ballot in three states.

Photos: Brian Blanco/Jim Watson/AFP via Getty Images

Politics

2020 election

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

Circa, the first ground-up resort built in downtown Las Vegas since 1980, opens today with what's being billed as the "world's largest sportsbook."

The book: The three-story, 1,000 seat auditorium faces the world's largest TV screen, and the top floor is filled with media studios, where sports betting networks like VSiN will broadcast live shows. 

The rooftop: On top of the resort is a multilevel pool called "Stadium Swim" with a 40-foot tall screen, swim-up bars and poolside mobile wagering kiosks.

The state of play: The pandemic crushed Vegas' tourism industry this spring, and gaming revenue plummeted as casinos and sportsbooks sat dormant for months. Most are back open now, but they're operating at limited capacity.

🎥 Watch: Tour the Circa Resort & Casino (YouTube)

Now open: The world's biggest sportsbook

The pandemic crushed Vegas' tourism industry this spring, but the three-story, 1,000 seat auditorium opens today.

Data: Legal Sports Report; Chart: Andrew Witherspoon/Axios

New Jersey's sports betting market shattered its own national record in September, taking in nearly $749 million in bets.

By the numbers: Online bets accounted for 90.7% of September's handle ($678.7 million). FanDuel Sportsbook/PointsBet topped the market with $25.1 million in gross revenue.

The state now holds two of the five largest handle months in legal U.S. sports betting history:

New Jersey: $748.6 million (September 2020)

The big picture: New Jersey was the third state to legalize widespread sports betting after the repeal of PASPA in May 2018. Since then, it has accepted over $9 billion in wagers, yielding over $68 million in tax revenue for the state.

New Jersey is America's new sports betting capital

It took in nearly $749 million in bets in September.

Reproduced from American Gaming Association; Cartogram: Axios Visuals

2020 was poised to be a big year for sports betting. Some of that momentum was lost due to the shutdown, but the industry is still surging ahead — and holding out hope for a massive fall.

The state of play: Sports betting is now legal and fully operational in 18 states, plus Washington, D.C.

Another four states — Virginia, North Carolina, Tennessee and Washington — have passed bills legalizing it this year, but are not yet operational.

Driving the news: William Hill opened a temporary sportsbook at Washington, D.C.'s Capital One Arena last Friday, making it the first pro sports stadium or arena in the country with a full-service sports betting operation.

A permanent sportsbook is being built inside the arena, but with construction delayed, the ticket box office area was converted into a temporary site.

Legal (18 states plus D.C.): Arkansas, Colorado, Delaware, Illinois, Indiana, Iowa, Michigan, Mississippi, Montana, Nevada, New Hampshire, New Jersey, New York, New Mexico, Oregon, Pennsylvania, Rhode Island, West Virginia, Washington, D.C.

Passed bill (4 states): North Carolina, Tennessee, Virginia, Washington.

Active bill (9 states): , Hawaii, Kansas, Louisiana, Maryland, Massachusetts, Nebraska, Ohio, South Dakota, Vermont.

Failed legislation in 2020 (12 states): Alabama, Alaska, Arizona, California, Connecticut, Florida, Georgia, Kentucky, Maine, Minnesota, Missouri, Wyoming

No legislation in 2020 (7 states): Idaho, North Dakota, Oklahoma, South Carolina, Texas, Utah, Wisconsin

Go deeper: The NFL's slow embrace of sports betting

The states that have legalized sports betting

Sports betting is now legal and fully operational in 18 states, plus Washington, D.C.

Data: Legal Sports Report; Chart: Naema Ahmed/Axios

Two years ago today, the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), which had prevented states from creating their own sports betting regulations.

Where things stand: 24 months later, 18 states and counting have legalized it, launching an explosive new industry that touches sports, media, technology and more (though the pandemic has slowed growth in what was set to be a big year).

It all started in New Jersey, which has since nearly caught up to Nevada in terms of revenue generated (see above). And thanks to a favorable tax rate, New Jersey ($62.6 million) has earned significantly more than both Pennsylvania ($43.6 million) and Nevada ($39.3 million) in taxes.

If there's one early trend whose veracity we can be confident about, it's that mobile betting is the future of the industry. Do you really think New Jersey (population 8.8 million) would out-earn New York (population 19.5 million) if the latter let people bet on their phones?

What they're saying: Most states allow casinos to operate freely, taxing them as they would any business. But a handful run their casinos at the state level under a revenue-sharing model, which Dustin Gouker of Legal Sports Report tells me is a shortsighted strategy:

"The states with more open markets (N.J., Pennsylvania, Indiana) have outperformed those without them (Oregon, Rhode Island). It's too early to make calls beyond a shadow of a doubt, but both Oregon and Rhode Island would clearly be doing better if they took less money with an open system."

Looking ahead: Former American Gaming Association executive Sara Slane, who now advises companies in the space, lays out five key trends to watch moving forward.

The line between sports and casinos will blur as the two industries fight to capture discretionary dollars. Think: The sportsbook inside Washington, D.C.'s Capital One Arena.

Mobile and retail operators presenting a unified front. "Expect to see a shared wallet for online gaming tied back to retail, more cashless payment acceptance on the casino floor, and rewards and comps for online play."

Optimizing the "watch and bet" experience. Live lines must be set quickly and internet connections can't lag.

Tech companies will enjoy rapid growth. Even (especially?) during a pandemic, "online sports betting presents an opportunity for innovation in a traditionally anemic industry."

Gaming regulations will evolve with the times. "Sports betting will move the regulatory process forward to meet consumer demands."

The bottom line: So much has changed in just two years, but in reality, it's only just begun.

Go deeper: Coronavirus sends sports betting scrambling

Sports betting, two years later

18 states and counting have legalized it, launching an explosive new industry.

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This story first appeared in Axios Sports

Colorado became the 18th state to officially begin accepting legal sports wagers, including via online sportsbooks, at the start of May.

Why it matters: The convenience of mobile betting is the future, and with sports creeping back, Colorado can treat the next few months more or less like a beta test as it prepares for the wave of that will come when sports return in full.

The state of play: Since PASPA was repealed two years ago, states have steadily passed sports betting legislation. Some allow mobile betting, while others require bettors to place wagers in a physical casino.

Mobile betting: New Jersey's sports betting volume nearly matched Nevada's within its first year, largely thanks to a massive mobile footprint, which saw 86.5% of a record $562.7 million wagered in November 2019 coming from online bets, per Legal Sports Report.

No mobile betting: New Yorkers are so desperate for mobile betting that they're taking their phones across the river to New Jersey, costing New York millions in tax revenue. Multiple other states with sports betting, but no mobile option, fell way short of revenue projections last year.

The big picture: Developers like Boom Sports, who just inked a huge deal with Penn National Gaming to operate mobile sportsbooks in five states where online sports betting isn't even legal yet, believe that policy will eventually catch up with consumer behavior.

"When we started Boom Sports five years ago, we looked at the market, and less than 1% of all casino gaming revenue was generated online. It was still 99% generated in land-based casinos, and we just knew based on the world and where it was going, that was going to change in a big way."

The bottom line: Sports betting has long been associated with bookies and casinos, but those days are coming to an end. Now, sportsbooks' target customer is closer to your average sports fan — and the best way to reach the vast majority of them is through their phones.

The growth of mobile sports betting

The best way to reach the vast majority of average sports fans is through their phones.

Illustration of a group of phones with the hundred dollar bill on the screens

In recent weeks, Illinois and New York have introduced bills that would allow in-person sports betting at sports stadiums and arenas — and the Chicago Cubs are considering opening a sportsbook inside and outside of Wrigley Field.

Why it matters: Sports venues are among the most underutilized pieces of real estate on Earth. NBA teams play 41 home games per year, NFL teams play just eight, and when you go to those games, it's not like they let you hang out. Here you have this immaculate structure and they're ushering you out the door.

Once in-stadium betting arrives, it could transform the game-day experience, giving fans a place to congregate before and after the game as opposed to, say, the bar across the street.

Even those without tickets would likely be drawn to the on-site sports book, which would presumably be accessible from outside and could spawn additional investment in the surrounding area (restaurants, shopping).

Be smart: The teams would outsource the actual bookmaking, as that would be considered a conflict of interest. So they'd basically be operating sports betting lounges. Think TVs, couches and kiosks.

The bottom line: "Imagine Madison Square Garden — in the heart of midtown Manhattan and located atop the busiest railroad station in the Western Hemisphere — repurposed as the world's largest sportsbook," writes The Athletic's Daniel Wallach.

"The economic impact of such an arrangement could be a game-changer for states."

Go deeper ... Media companies' newest wager: Their commitment to sports betting

How on-site sportsbooks could transform stadiums

Sports venues are among the most underutilized pieces of real estate on Earth.

A graphic of a stadium with large dice rolling through the middle. 

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