NFL embraces legalized sports betting
NATHAN ROTT, HOST:
Football is back. The National Football League season officially kicked off on Thursday, meaning, for fans like me, Sundays from now until February are going to be filled with America's most popular sport. But even if you're just a casual viewer of football or really any network television program, you've probably noticed an explosion of advertising for a related business - sports betting.
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JAMIE FOXX: You want to make every game interesting? Step one - open the BetMGM Sportsbook.
KEVIN HART: Two hundred thousand instantly, just for spending five bucks? Draft-Kings, listen to me.
J B SMOOVE: The more you play on my app, the more you earn with season rewards.
UNIDENTIFIED PERSON #1: Check it out. I'm going full Caesar.
ROTT: The ads are pretty hard to miss and littered with celebrities. After decades of distancing itself from sports betting, the NFL is now going all in and embracing the multibillion-dollar gaming industry. Heck, even the Super Bowl is going to be played in Las Vegas at the end of this season. And for the NFL, it really does mark a huge change, a change that's come in the wake of a 2018 decision by the nation's highest court.
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ARI SHAPIRO: By a 6-to-3 vote, the U.S. Supreme Court threw open the door today to sports betting. It ruled...
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JAN CRAWFORD: Justices said a 1992 federal law that banned all but a handful of states from having sports betting violated states' rights.
ROTT: Now the league has officially partnered with DraftKings, FanDuel and Caesars Entertainment - all major betting sites. As long as their state allows it, that means football fans can now bet on everything from how many yards a quarterback throws for in a given game to who catches the first touchdown - again, as long as it's legal in your state.
CARRON PHILLIPS: This was a league that was staunchly against gambling. And then literally, when money got thrown in their face, they completely hit a 180 and was like, give us all the money.
ROTT: Carron Phillips writes for the sports site Deadspin. He says the ramifications of gambling sets up a serious dilemma for the league.
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MARTIN SAVIDGE: Well, the NFL has suspended an Arizona Cardinals player through at least next season.
UNIDENTIFIED REPORTER: Breaking news out of the NFL - the NFL has suspended five players for violating the league's gambling policy.
PHILLIPS: The league has put themself in a position of where they have to be - you know the old saying - judge, jury and executioner with this because they don't have a choice. Now, the NFL has proven that it is Teflon and too big to fail. But if there is one thing that was ever going to bring the NFL down a peg or it will lose some of its luster, it would be a gambling rig, a sports betting rig with players or coaches or front office members.
ROTT: In total, 10 NFL players have been suspended for gambling violations since April. Legalized sports betting is now legal in 34 U.S. states and the District of Columbia. And the NFL didn't waste a second teaming up with some of the biggest names in the industry. Will the NFL's financial and cultural gamble backfire?
DAVID PURDUM: Anytime a illicit activity such as sports betting is brought aboard, brought into the regulated environment, society struggles with it in the first early years. They try to figure out, well, what can I do? What can I not do? What's against the rules? You know, what's allowed?
ROTT: ESPN's David Purdum was covering the gambling industry long before the 2018 Supreme Court ruling. And full disclosure - sports betting companies do sponsor and advertise on ESPN. But since that ruling, the sports betting industry looks very different. And in some ways, so does the NFL. We called him up to talk about it.
How did that ruling change the relationship between sports and betting?
PURDUM: Changed it a lot. It has been really a overwhelming change and quickly. Before the ruling, you know, they were fighting to keep sports betting basically restricted to Nevada, at least the legal version of it. They fought it all the way to the Supreme Court. They lost. As soon as that decision comes down, boy, they've done 180 pivots on their stance on sports betting - embracing it in a lot of ways, partnering with sports books. You're now seeing odds and lines and point spreads infused into media coverage where they used to be kind of pushed back towards the back and kind of kept in the shadows. But now I always think sports betting right now is more in our face than it ever has been in the history of the U.S.
ROTT: So explain for - why was the league pushing back? Why was it fighting against, you know, a broadening of sports betting?
PURDUM: Well, the league's stance was that a broadening of sports betting - legalized sports betting would threaten the integrity of the games. They thought that it might lead to more attempts at fixing - compromising games for gambling purposes. There's also a theory out there that that was kind of a facade, and they were just more trying to figure out the best way to position themselves before this inevitably happened. So the leagues were fighting it. At the same time, they were trying to figure out, OK, when this happens, how can we be in the best position to capitalize and monitor everything, the betting on the games?
ROTT: OK. So 2018, Supreme Court says, hey, yes, states, you can now allow sports betting. Can you walk us through the kind of about-face that the NFL has had on sports betting since then?
PURDUM: It's amazing. It's a complete 180. They were - talked about how the legalization of sports betting just in New Jersey would irreparably harm the integrity of the league. And now they've embraced it. They have multiple sportsbook partners - MGM, Caesars, FanDuel, DraftKings. There's also sportsbooks inside NFL stadiums now, and they will be allowed to be open for the first time on game days this year. Washington has one. I believe the Bears are looking at putting one. There's one at Wrigley Field. When you're going to gravitate over into Major League Baseball, there's a sportsbook at the Arizona Cardinals Stadium. It is pretty crazy how quickly that they have switched their position on this and embraced it.
ROTT: And, David, maybe you can clarify for me. You know, these partnerships that the NFL has made with some of these betting companies - do they get paid for having the outlets in these stadiums and for giving them stats? I mean, how does that work?
PURDUM: Yeah. There's different systems of how it's put together, and transparency of the contracts has not been there - we haven't seen exactly. My understanding is some is just a vendor - just, like, a rental thing. They rent the property, and then they pay a rent to them. So that's how at least some of them work. Other parts of the deals where they're going to get some sort of cut from the amount wagered on the games, right? You know, maybe it's a very small percentage.
A lot of times, that comes down to the data. Maybe something in the contract says, OK, we'll allow you to have our license here in Virginia. And some sports leagues have been granted - sports franchises have been granted betting license. And then they kind of partner out with a FanDuel or a DraftKings. And sometimes, in those arrangements, my understanding is that it could be, OK, you partner, you've got to buy our data and use that to fuel your sportsbooks. And that's how - another way they monetize it.
ROTT: So what is the motivation for the league here? I mean, do they gain anything besides money, and is there something they're losing here, too?
PURDUM: Well, money is the No. 1 thing.
PURDUM: Everything will always lead back to the money. How can we make the most money? And they do it through fan engagement. There's been studies in the past where if a point spread is in play in a blowout game, the ratings are a little bit better. Fans will stick around longer when the point spread is in play. So ratings are the big one that they're trying to go through in the marketing from it.
ROTT: Yeah. If you got money on the line, you're going to pay more attention to a game, right?
ROTT: All right, so I want to step back. ESPN and other outlets have reported about the confusion amongst NFL players and coaches about the league's gambling rules as they apply to players, right? I think - I'm a big Denver Broncos fan, and our new head coach, Sean Payton, was quoted earlier this offseason saying that even he was more confused about reading the league's sports betting guidelines when they were - came out. What's making this so difficult?
PURDUM: The confusion stems from where the bets can be placed. So the athletes, the players - in the NFL, they have an exemption where they are allowed to bet with legal operators on anything except for the NFL.
ROTT: OK. So any other - like basketball, tennis, you know, you name it.
PURDUM: NBA, baseball, tennis, whatever, as long as it's not related to the NFL. Where the confusion, a lot of these players got tied up - you're not allowed to place the bets while you're at work. That includes if you're on a trip for a road game, in the hotel, wherever. If you're on that trip with them, you're considered at work, and you're not allowed to bet. And a lot of normal corporations probably have similar things. They don't want you sitting around betting, gambling while you're at work. And that's where a lot of the guys got tripped up, and I can understand that. I do not understand there to be any confusion on anyone that thinks that it's OK for them to be betting on the NFL when they're playing...
PURDUM: ...In the NFL. And there has been a handful of those guys who have done that, and they have lost a whole year of their career.
ROTT: So 34 U.S. states, D.C., now allow sports betting. Should we expect to see more states legalize this in the coming years?
PURDUM: Yeah. We're going to get Kentucky here at the start of football season. That will add it on. The big states are still out there, though, right? California and Texas both have taken serious looks at it. It's very complicated in those states and the casino industry. There's tribal gaming interests that are very powerful in California. So it's going to take a while. But if you think how big the market has grown - and there's already been 250 billion - billion with a B - dollars wagered with U.S. sportsbooks since that Supreme Court decision. So we've already had that, and we don't even have California and Texas on board. This market is going to only continue to grow.
ROTT: So we're talking about the NFL's embrace of sports betting. Have other professional sports league also embraced sports betting since this decision in 2018?
PURDUM: I can't think of one that hasn't.
PURDUM: NBA - sportsbooks inside the arenas; Major League Baseball - we mentioned Wrigley Field has a sportsbook now. They all have partnerships and advertising deals with various sports betting operators, and they're all looking for ways to monetize this. And a lot of times, that comes down to their data, their statistics. And if they can show the sportsbooks that, hey, you really need our accurate and prompt statistics - because remember, a lot of the betting now doesn't just happen before the game. It's happening throughout the game, what they call in-betting (ph). In order to fuel that live betting, you got to have those statistics, and you've got to have them quickly. And so that's one of the ways that all the sports leagues are trying to monetize this.
ROTT: That was ESPN staff writer David Purdum. We reached out to the NFL for comment and have not yet heard back. The American Gaming Association says that 73.5 million American adults - that's 28% of all American adults - plan to bet on the NFL this season.
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