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Challenges faced by the US betting industry

A lot has changed since May 2018 in the United States betting industry. The overturning of the Professional and Amateur Sports Protection Act (PASPA) brought legal sports betting opportunities to individual states.

No longer did Nevada have the monopoly on sports betting. Each state was given the opportunity to vote on legalizing sports betting and manage it from a state level. 

New Jersey led the fight and now many states across the United States have legalized sports gambling in one way or another. 

Had you previously wanted to place a Super Bowl bet or make your picks for March Madness, you’d have had to hop on a plane to Nevada to place it. 

A number of challenges awaiting teams and leagues such as the NFL, in how to manage this opportunity to work with sports books. The revenue opportunities had been greatly increased but there are a number of challenges to overcome.

Vertical Integration

One of the difficulties faced in the US gambling industry is the way in which new companies can enter the market.

All of a sudden, millions of new customers are now available to reach, especially through online sports books.  There have not been legal sports books operating in the United States outside of Nevada which means that domestic company’s need to be created or expanded out of Nevada.

One key issue they face is that some bigger operators from abroad have been able to access the market with a strong reputation and background in sports gambling and online casinos already.

They do not need to start from scratch, they are just opening their facilities to new customers. With some sports books and online casinos operating globally already, their ability to move in and dominate the United States market is almost seamless.

With the market dominated by some big players, the United States market is still somewhat in its infancy. There are still reputations to be made as reliable and dominant forces for sports books, as many customers will be new to the industry when signing up. 

Where to draw the line?

While the industry expands and customers are often delighted to be able to enjoy wagering on the sports they love, the leagues and clubs have some responsibility to protect their supporters. 

The States will provide guidance and ensure that the sports books operate safely, but there can always be the concern of addiction amongst the general public.

The sports books themselves know that sponsoring teams and leagues and having their names associated with them is great for business. The people making the decisions in each league and team though need to be aware of their image and influence.

The NFL needs to be aware of the fact that they are globally popular and the rules on gambling in each country vary. Many people from around the world gamble on the NFL each week, throughout the season, and its global appeal has been supported by this. 

In the United States it is already their most popular sport, they did not need the sports books backing to make it so. But with sports gambling sponsorships, the revenue the leagues can bring in become much higher. 

Structure

As we have just mentioned, the appeal of the revenue sports betting can bring to leagues and teams in all sports is huge. It is clear that the sports books hold a strong hand in the negotiations for how they would like partnerships and sponsorships to be carried out in order for them to continue making large profits.

Those in charge from the sports side need to ensure a clear structure is put in place for how they wish to partner with sports books in order to have control and security of their image as well as for the supporters.

Clear guidelines on advertising and branding need to be set up, while support for those who use sports books needs to be highlighted for example. The teams and leagues do not want to be seen to be taking the money and running, they need to be strong in the partnerships. 

The NFL have shown that they are setting boundaries for the sports betting industry to ensure they keep control. Limits have been placed on the in-game commercials on sports betting. In NFL specifically there can be a number of breaks due to how the game is played and not submitting viewers to constant reminders to gamble was seen as an important step.

The way in which the leagues and teams do their research on who they wish to partner with is important. Making sure that the sports books they do business with are trustworthy and at the highest level of confidence in the good of the customer.

There will continue to be adaptations that are required with the potential of new company’s or changes in laws across the United States, meaning the NFL and its teams in particular need to be strong partners in any deals they make.