MoffettNathanson Research is forecasting “exponential” growth in the sports betting marketplace over the next decade and that in turn is expected to fuel increased ad spending in the red-hot sector. After generating $1.13 billion in 2020, sports betting revenues are poised to more than double to $3.6 billion this year, according to the research firm as reported by MediaPost. By 2025 the market will be worth $11 billion before hitting $15 billion in 2030.
The report also predicts the ties between media networks and sports books will only get tighter in the near future. Such partnerships are already prevalent in radio and TV. For example, iHeartMedia has a multi-year strategic relationship with DraftKings, making the sportsbook the official odds supplier for iHeartMedia’s broadcast, digital, podcast and social platforms. Audacy formed a multi-year strategic partnership with BetMGM that makes the sports betting and gaming platform a preferred partner across the company’s sports stations, the Audacy and BetQL apps and digital platforms and the BetQL Audio Network. And Cumulus Media has a multi-platform partnership with WynnBet.
Fox Corp., meanwhile, holds a small equity stake in Fox Bet, Fubo TV has a partnership deal with the FanDuel Group and Bally’s Corp. has a marketing/brand deal with Sinclair Broadcast Group, per MediaPost.
In addition, Walt Disney Co. owns roughly 5% of DraftKing’s shares, and Disney’s ESPN has a long-term alliance with DraftKings. “It actually strengthens the brand of ESPN when you have a betting component, and it has no impact on the Disney brand,” said Disney CEO Bob Chapek. “We necessarily have to seriously consider getting into gambling in a bigger way.”
But that only scratches the surface of what MoffettNathanson recommends in its report: “We think it would be much more interesting and beneficial for [DraftKings] to pursue a formal merger with ESPN if Disney is willing to spin the sports leader out to help improve ESPN’s valuation.”
Online sports betting has mushroomed into a major ad category for radio with a forecasted $125 million expected to be spent on over the air radio in 2022, per BIA. Radio’s largest operators reported swift growth in sports betting ad sales on their third quarter 2021 earnings calls and forecast more for 2022 as additional states permit legalized online wagering. With four of the country’s most populous states – New York, California, Texas and Florida – expected to legalize sports betting in the months and years ahead, the category is poised for continued growth beyond the 18 states and the District of Columbia where online gambling is currently live and legal.