Live Sports Streaming’s Silver Lining: Legalized Gambling – Media Play News

Erik Gruenwedel

November 27, 2024

Lost in the hype and chaos of Netflix’s exclusive live-streamed boxing fight card, headlined by Jake Paul’s unanimous win over former champ Mike Tyson, was the event’s legalized gambling draw.

With numerous ads and on-screen promotions for DrafKings and BetMGM during the Netflix live-stream, the fight was reportedly the most bet-on fight in combat sports (UFC, MMA, boxing) history, with four-times more money wagered than any fight in history, according to BetMGM.

Sports gambling popularity has exploded since 2018 when the U.S. Supreme Court struck down a 1992 federal law that prohibited states (except Nevada) from legalized sports betting. Now 38 states and Washington, D.C., allow legalized sports betting.

This year, online sports betting revenues are projected to reach $12.37 billion, according to EMarketer’s September 2024 forecast.

Ross Benes, senior analyst with research firm E-Marketer, says online sports gambling’s explosive growth is mirroring burgeoning professional sports media rights that now include live streaming.

Annual U.S. sports rights will reach $29.54 billion this year, and by 2027, yearly rights are expected to cost $34.72 billion, according to S&P Global Market Intelligence.

The media rights are expanding as Prime Video, Netflix, NBC Sport/Peacock, CBS Sports/Paramount+, Apple TV+, and Warner Bros. Discovery’s Max streaming all embrace live sports.

The NFL and NBA separately inked 11-year media rights agreements that totaled $111 million and $77 billion, respectively, with live streaming in the crosshairs.

“Media rights have just skyrocketed,” Benes said in a recent webinar. “They’re double what they were [seven years ago].”

Indeed, Prime Video alone is spending $1 billion a year over 11 years for exclusive rights to NFL “Thursday Night Football”.

“Streaming services, even if they’re going to lose money short term, want to bet on sports because they’re trying to attract subscribers,” Benes said.

Citing third-party data, EMarketer said domestic sports-themed betting apps were downloaded almost 35 million times in 2023. For media companies, sports betting endorsements offer a crucial revenue stream to offset rights’ expenses, they will also eventually up subscription fees.

“If TV networks and streaming services pay double or triple what they used to for rights, they pass that cost to customers,” Benes said.