Ep 2 – Using Tech to Establish Your Brand

Here’s the million dollar question for match day: How do you get the fan to download the app?

Recently on Behind the Business of Sports, we talked with three experts about establishing your brand for your stadium, your app, and your match day experience: Harrison Kim, Senior Director of Business Strategy at Austin FC; Jonathan Martinez, Vice President, Revenue Planning & Analytics at Las Vegas Raiders; and Kendall Tyson, Vice President, Strategy & Business Intelligence at Seattle Kraken.

What we talked about:

  • The strategic use of surveys & fan willingness to respond
  • All things mobile app strategy
  • Building brand with creative technology
  • Sponsorships that build community

Tap into more sports and entertainment insights by subscribing to Behind the Business of Sports on Apple Podcasts, Spotify, or wherever you listen to podcasts.

Listening on a desktop & can’t see the links? Just search for Behind the Business of Sports in your favorite podcast player.

 
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Have an idea or topic you would like us to cover in future episodes? Reach out to us directly at bspod@koresoftware.com. 

KORE is the global leader in engagement marketing solutions, serving more than 200 professional teams and 850+ sports and entertainment properties worldwide, providing practical tools and services to harness customer data, facilitate sponsorship sales and activation, and create actionable insights.

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Deal Scoring – Comparing Investments Across Markets

Brands enter into multiple sponsorship deals because they want to increase brand awareness (among other objectives) across different audiences at different events. But the return on these marketing investments can be difficult to put a number on, making the investments tricky to justify. How can you determine which sponsorships will be most effective?

Sometimes, there may be significant overlap among fan bases—quite a few ice hockey fans also enjoy basketball, for example. Is it cost-effective to sponsor both local teams? Or would you be better served by sponsoring just one of them and moving the other investment to something like Olympic badminton in hopes of reaching a much different audience?

Partnerships can range from the largest international events in the world to supporting a local flower festival. An NBA or NHL game might have stronger attendance, but a local partnership might make a stronger impression within a community. Can smaller, locally-focused events produce the results you’re looking for?

These aren’t easy questions to answer, but many of our clients at KORE use deal scoring to gain effective insights. In theory, the process is straightforward—identify your investment goals and establish scoring metrics for those goals, then comparing those scores against the money spent. In practice, this means asking a lot of questions.

Let’s look at an example of how one brand leverages KORE Planning & Insights (KPI) consulting to measure their array of investments. This  brand sponsors multiple types of entertainment including sports, concerts, and local festivals. When we collaborate with a brand like this, we begin the deal scoring process with questions like:

  • Who do you have partnerships with?
    • Collecting partnership deals and categorizing them by type of rights, events, and/or assets brands are entitled to.
  • What are the different value drivers?
    • Evaluate different pillars to measure.
  • What data sources do we need to consider, and how do we display them together?
    • Different objectives likely live across multiple data sources: Zoomph for social media, Google Analytics for website traffic, Nielsen for research, etc.
  • What are your objectives and how are they weighted?
    • Leverage metrics to identify scores for what they want to achieve from each partnership, then aggregate the data in a centralized location.
  • How is your portfolio performing compared to your goals and expectations?
    • The evaluation process considers both the quantitative and qualitative factors previously established. 

After metrics have been accounted for and evaluations have been centralized, weighted, and scored, we can plot them on a graph to visualize the portfolio:

KORE is the global leader in engagement marketing solutions, serving more than 200 professional teams and 850+ sports and entertainment properties worldwide, providing practical tools and services to harness customer data, facilitate sponsorship sales and activation, and create actionable insights.

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Ep 1 – The Return of The Fans: Logistics Behind Opening Stadiums Up Again

Sports and entertainment organizations are beginning to welcome fans back into venues. 

What variables and uncertainties do they need to consider to operate safely post-pandemic? 

In this episode, we interview Corey Ruff, VP of Business Analytics at the Chicago Bears, David Elgin, VP of Analytics at the Atlanta Hawks, and Drew Lindley, Senior Manager of Corporate Partnerships at the City & County of Denver, about the logistics behind opening stadiums up again.

We also discuss: 

  • How their marketing teams are communicating with fans. 
  • Processes they improved on while they were shut down. 
  • Innovative solutions they developed during the pandemic. 
  • How vaccines factor into planning.

Tap into more sports and entertainment insights by subscribing to Behind the Business of Sports on Apple Podcasts, Spotify, or wherever you listen to podcasts.

Listening on a desktop & can’t see the links? Just search for Behind the Business of Sports in your favorite podcast player.

 
powered by Sounder

Have an idea or topic you would like us to cover in future episodes? Reach out to us directly at bspod@koresoftware.com. 

KORE is the global leader in engagement marketing solutions, serving more than 200 professional teams and 850+ sports and entertainment properties worldwide, providing practical tools and services to harness customer data, facilitate sponsorship sales and activation, and create actionable insights.

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Ep 0 – Behind the Business of Sports (BS) – Introduction Episode

When you work in the sports business, you hear a lot of amazing stories… 

And it would be a crime not to share them.

That’s why here at KORE Software, we’re launching Behind the Business of Sports — a podcast dedicated to bringing together guests from various areas of the entertainment industry, as well as brand leaders, to discuss, collaborate, and advise each other on best practices.

In this episode, Adam Grow, Chief Operating Officer, and Jordan Rutner, Research Marketing Manager, introduce the show and detail what you can expect from the Behind the Business of Sports podcast.

Tap into more sports and entertainment insights by subscribing to Behind the Business of Sports on Apple Podcasts, Spotify, or wherever you listen to podcasts.

Listening on a desktop & can’t see the links? Just search for Behind the Business of Sports in your favorite podcast player.

 
powered by Sounder

Have an idea or topic you would like us to cover in future episodes? Reach out to us directly at bspod@koresoftware.com. 

KORE is the global leader in engagement marketing solutions, serving more than 200 professional teams and 850+ sports and entertainment properties worldwide, providing practical tools and services to harness customer data, facilitate sponsorship sales and activation, and create actionable insights.

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Visualizing Sponsorship Assets Across Collegiate Programs

Enter the third week of March, best known for trading an hour of sleep for some extra daylight, St. Patrick’s Day, and—of course—college basketball. If you flipped through any sports channels over the past week, you likely saw a story reflecting on how the Men’s and Women’s NCAA® tournaments were cancelled almost exactly 12 months ago. Following the success of the other professional leagues using “bubbles” to close out COVID-shortened seasons.

To join in on the fun, KORE imagined what a tournament bracket of sponsorship assets might look like. Which opportunities are brands most likely to sign up for? What assets are rights holders selling most frequently?

To begin, we selected the 32 sponsorship products included in the highest number of deals. This isn’t the same as the “most sold” products; some sponsorship assets are commonly sold in large quantities (such as digital signage) while others are much more limited (such as Presenting Sponsor rights). Our data shows that the average collegiate sponsorship deal (across all sports and genders) contains three single-quantity assets out of 11 total assets.

The table below shows sponsorship products, organized by which category they are mapped to.

Schools and conferences can have their own unique sponsorship deals separate from the NCAA® —especially in local markets. Our bracket summarizes deals at the school and conference levels.

After dividing up the assets into four “regions”, they competed head-to-head—those included in the most separate deals moved on to the next round. The four semi-finalists included most often in collegiate sponsorship deals, in order are: radio, website, LED, and tickets.

The first thing that sticks out is the large presence of radio products across the country. This asset is included in over 40% of deals last year and is very prominent because of its affordable cost—a result of the length of a typical sporting event and a frequent surplus of slots to fill. It can feel like a bit of a throwback to older times when compared to other top products, though there’s still value to be had.

LED signage emphasizes the importance of TV-friendly assets, while the inclusion of tickets reflects the value sponsors can find in entertaining their clients. Companies that associate their brands with sports often have fans who are enthusiastic to support their local teams, and can use these assets for prospecting and customer appreciation.

Shifting to website assets, Capital One has one of the most prominent ads on NCAA.com. And anyone who watches even a few minutes of a tournament game will likely see Capital One’s courtside LED signage and/or TV commercials. Seeing this brand extensively use two of the top four products demonstrates the value large organizations are putting on these assets.

One surprise is that streaming assets didn’t make it past the first round. Nielsen confirms that streaming viewership is on the rise and that subscription video on-demand (SVOD) programming reaches an audience that traditional TV typically would not. However, the NCAA® and CBS have such a massive broadcasting contract through 2032 that it’s clear streaming just isn’t a major asset yet. Even so, we may see more adoption of streaming during this year’s tournament which is available on Paramount+ (owned by ViacomCBS). But TV is still where it’s at—and with the excitement for this year’s tournament after last year’s was scrapped, TV ratings will likely match 2019’s impressive growth numbers.

KORE is the global leader in engagement marketing solutions, serving more than 200 professional teams and 850+ sports and entertainment properties worldwide, providing practical tools and services to harness customer data, facilitate sponsorship sales and activation, and create actionable insights.

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Show Me the (Digital) Money!

The NFL’s Big Game is always a leader in combining entertainment and technology. This weekend we will all experience a more virtual and futuristic feel, for those in attendance and watching elsewhere. Hosting for the fifth time, Raymond James Stadium in Tampa will be operating cash-free when they welcome a limited number of fans to the Big Game this Sunday, a trend that has been enhanced of recent.

The sports and entertainment industry is eager to welcome fans again soon, but COVID concerns won’t disappear all at once. Attitudes toward gathering in crowds and eating out have changed, but there’s just no substitute for enjoying some stadium grub with a cold drink. Clean and efficient concession operations will be a top priority for organizations, putting new technologies and processes to the test.

Technological innovation has accelerated over the past 12 months, but it’s not a new focus. In 2019, Oracle Food and Beverage surveyed sports fans around the world. When they asked fans about a “stadium of the future”, the four biggest takeaways were:

  1. Fans want to stay in their seats.
  2. Sports fans are open to new technology.
  3. Fans are already using new tech (such as paperless tickets).
  4. Loyalty program interest is high but participation is low.

When adopting new technology, it’s crucial to weigh the costs and benefits of the transition. For stadium food and beverage (F&B) services, that means examining fully cashless payment options. This isn’t unheard of in our industry: the Tampa Bay Rays in 2018 were the first sports team to go cash-free. They immediately saw wait times reduced by up to 50%, letting fans get back to their seats much faster.

But what happens when a fan doesn’t have a payment card? In October 2020, Yahoo! Finance explored the risks of a cashless society. These same risks apply at the smaller scale of an individual sports venue. In particular, Yahoo! points out that several demographic groups “have little or no access to electronic payments.” Sports are one of the few things that truly bring together people from all walks of life, so going cashless could exclude some fans.

One of the biggest players in global hospitality, Delaware North, will soon test a solution. They recently announced a partnership with InComm Payments to “implement cashless payment solutions at sports venues”. InComm will allow fans to exchange cash for a purchase card at the stadium. Fans won’t pay any purchase fees, and the cards can be used anywhere the payment network (such as Visa or American Express) is accepted. Since unused funds won’t be “stuck” within the venue, fans won’t feel forced to decide their max spend before their very first purchase. The partnership plans to issue and accept these network-branded cards in venues around the world—Delaware North operates concessions and retail for over 25 major professional sports venues in the U.S., and hundreds of entertainment facilities around the world.

All concessionaires stand to benefit from the influx of new data, but digitally tracking payments adds an overwhelming amount of data to process and analyze. Users of KORE Data Warehouse & Analytics™ can leverage the Insights layers to track and project not just F&B spend, but all retail data. Our tools enable reports to pull data from over 80 different integrations.

By integrating these different sets of data, organizations can bring together F&B spend, other retail spend, social media activity, game day and event data, and more. KORE’s tools then help you drill-down into your data. For example, one built-in report focuses on game-by-game sales with the ability to benchmark it across the entire season. In the example snippet below, we see the majority of in-stadium purchases happen within the first half hour of the in-progress game. These insights can be used for stadium security, retail staffing, and concession preparation.

The future is not necessarily cash-free, but there’s a strong trend toward streamlining in-stadium purchasing. Interested in learning more about how to process and analyze your F&B and retail data? We’d love to give you a free demo of KORE Data Warehouse & Analytics!

KORE is the global leader in engagement marketing solutions, serving more than 200 professional teams and 850+ sports and entertainment properties worldwide, providing practical tools and services to harness customer data, facilitate sponsorship sales and activation, and create actionable insights.

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How the Brooklyn Nets Are Turning Sponsorships Into Partnerships

The Brooklyn Nets recently announced one of the NBA’s most unique sponsorship deals. Starting in the 2020-2021 season, Motorola will bring their iconic “batwing” logo to the Nets’ jerseys. Motorola will also receive prominent exposure on the Nets’ practice jerseys and throughout the Barclays Center, along with opportunities to market themselves internationally with the Nets.

This may seem commonplace at first glance. Motorola is an experienced sports partner—in 2018, they inked a nearly $4 million per year deal with the Indiana Pacers. Motorola became the Pacers’ jersey sponsor and the presenting sponsor of the official team app, supplemented with a multitude of digital assets.

One outstanding point in the Nets deal is that Motorola is the first sponsor to display their logo on NBA practice jerseys. Another difference between these two deals is the local impact Motorola will have in the Brooklyn area. Motorola Solutions has a presence in Long Island City, just a short commute from the Nets’ arena. The company pledges to bring new STEM (science, technology, engineering, and math) educational programs to the Brooklyn community and donate smartphones to support online learning for homeless students.

But what really makes this deal stand out is how the Nets announced it using a strategic, athlete-centric approach. A 42-second promotional video features the team’s key players and lots of on-court action, much like a typical promotional video meant to get fans hyped for the upcoming season. It’s only at the 34-second mark that the Motorola logo is finally revealed on the new jersey. Unlike a traditional press release, the video has a “viral” appeal and resonates better with the Nets’ fanbase.

The objective of this partnership is very clear: Motorola wants to promote its brand and innovations in a wholesome way that also shows its commitment to the local community. They could have easily bought roadside billboards and extra TV commercials instead, but this represents a new type of partnership we’re beginning to see in the sports industry.

Identifying and tracking objectives is by no means a new practice, but many national-level sponsors are more focused than ever on the actual outcomes they want to achieve. For example, we’re starting to see a shift in emphasis toward key returns—not just the total number of impressions.

When the NBA jersey sponsorship program started in 2017, all partners had to commit to three-year deals. Now that these contracts are coming due, a few teams have started exploring the true value of these patches—both financially and culturally. As the NBA (and potentially MLB) gear up for the next wave of jersey sponsorships, we anticipate that corporate objectives will be key.

KORE is the global leader in engagement marketing solutions, serving more than 200 professional teams and 850+ sports and entertainment properties worldwide, providing practical tools and services to harness customer data, facilitate sponsorship sales and activation, and create actionable insights.

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A Master Balance: Tradition x Technology

After a seven-month delay, and zero egg salad sandwiches consumed by fans this year, we can finally crown our 2020 Masters Champion, Dustin Johnson. Scoring a record-setting -20 at Augusta National, Johnson rightfully defends his world No. 1 ranking and claims his first ever green jacket.

There are always a few “winners” when it comes to this tournament: the fans for attending a bucket-list event with some of the cheapest concessions in the world, Augusta National & the Masters itself, and the surprising few corporate partners allowed to say they are associated with the tournament. One thing people love about the Masters more than most sporting events? The lack of corporate logos and advertising noise normally associated with an event of this caliber. Golf’s tranquility is felt, regardless of which side of the screen you’re on.

Where Tradition Meets Innovation

The first Masters Tournament in 1934 was broadcast on CBS Radio. It was not until 1956 that CBS televised the event, an arrangement we still engage with today. Even more impressive, our current scoring of golf was heavily influenced by a new method introduced by Frank Chirkinian of CBS for the 1960 Masters tournament. Previously scores were cumulative rather than above/at/below par.

As traditional as the Masters is, the tournament has learned to embrace innovation both with how the game is played and consumed. During the 2020 Masters Tournament, its app ranked #12 in the sports category on the Apple app store, scoring 4 / 5 stars, with over 1,000 ratings. On the Google Play store, the app scored just below 4 / 5 stars while boasting over 10,000 ratings. According to medium.com, “…mobile apps lose 77% of their daily average users within the first three days after download,” which is arguably perfect for an annual four-day tournament for both the users and developers. The team behind the app now has plenty of time to continue to innovate for the user experience.

Silence on the Tee TV

When it comes to television the Masters is not as bulletproof as it seems. The details of the CBS deal are reserved to those signing the contract, but one source claims “CBS sends an invoice to Augusta National, and they check it out and get the money from their corporate partners to cover production costs.”

ESPN made an incredibly strategic move with its fall Saturday programming to promote ESPN+. While usually choosing college campuses and stadiums for the show’s location, the “College Gameday” flagship program chose Augusta National as its destination. For the 13th year, ESPN aired limited coverage on Thursday & Friday rounds, while only allowing ESPN+ subscribers the same coverage on the final days of the tournament.

Just like every other entertainment sector, ratings were negatively affected and hit a three-year low on the opening round on Thursday on ESPN. On top of that, Sports Media Watch reported the final round was the least watched Masters on record, dating back to when viewership records started being tracked in 1995. There are a lot of asterisks to consider, the main ones being earlier start times during the day and the unusual time of year. Fans had to choose between watching Sunday NFL morning shows and games or a Masters Sunday without Tiger Woods in contention.

Let’s Get Digital

TV ratings were down, and no fans were in attendance, yet the tournament was considered a success. Enter the Masters mobile app, which was introduced in 2009. The intent was to create a scaled down version of the Masters website and include live streams from ESPN and CBS.

Of all the digital partners, IBM comes out as the true winner. Being the driving technology force behind the Masters, IBM brought Watson-powered AI directly to golf fans through a new feature called “My Group.” This feature allows users to select their own golfers to follow and see all their shots with no down time. Of course, this is not “live” compared to watching on TV but watching a golfer’s entire round in only 20 minutes is unbeatable. In addition to making the viewing experience more personal, IBM partnered with Augusta National Golf Club “on a redevelopment project in the Harrisburg and Laney Walker neighborhoods in Augusta, Ga, alongside AT&T and Bank of America,” resulting in a true commitment to a longstanding partnership.

Looking Forward

The future of events remains unknown but we have a few ideas based on recent advancements in treatments, potential vaccines, and social distancing measures. The Masters TV broadcast is special because it directly focuses on two things, the golfers, and the course. The mobile app and website have been an excellent reflections of a modern viewing experience, and now offer further interaction with both the golfers and the course. Perhaps the digital experience can coincide with live fans in the future, but this was remarkable innovation nonetheless for such a traditional event.

KORE is the global leader in engagement marketing solutions, serving more than 200 professional teams and 850+ sports and entertainment properties worldwide, providing practical tools and services to harness customer data, facilitate sponsorship sales and activation, and create actionable insights.

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2020 World Series Preview

Welcome to the 2020 World Series. Hopefully, you read that in your best (or worst) Joe Buck impression. After an improbable season, we have finally reached a historic final round of the postseason. October baseball did not disappoint us: elimination game battles, Utz and T-Mobile commercials, and just enough robbed home runs by Mookie Betts (so far) to immediately justify the contract he signed back in February.

Metro vs Metro
Sport loves metaphors and KORE loves data. Almost every year, there’s a David and Goliath comparison to be made. Los Angeles vs. Tampa Bay fits this mold so appropriately that we got overwhelmed with the data disparity. Did you know the average price of a Dodger Dog in 2019 was $6.75 while a hot dog “only” costs $5 at Tropicana Field?

Los Angeles and Tampa Bay both have teams in almost every pro sports league. Yet according to Nielsen, LA is the second largest sports market in the U.S. while Tampa Bay ranks 12th. This is most evident in the 2019 attendance stats. Although they’re tied at nil this year, the Dodgers saw almost 4 million fans walk through their turnstiles during the previous season, compared to nearly 1.2 million for the Rays. That also gives us a pretty good guess at how many more hot dogs were sold at Dodger Stadium compared to Tropicana Field… not that we’re craving some ballpark grub, right?

Dodger Stadium in Los Angeles County has its own ZIP code, frankly because it can. Meanwhile, the Tampa Bay region consists of seven counties. The entirety of Tampa Bay is about 1,500 square miles larger than LA County, but LA’s population is still more than double that of Tampa Bay.

Tampa Bay’s sports teams are centered between Hillsborough and Pinellas Counties, the latter being where the Rays play their home games at Tropicana Field. Though clearly smaller, these two counties resemble Los Angeles County in a few ways—U.S. Census data shows they have similar education rates, poverty rates, and a higher Hispanic or Latino population compared to the U.S. more broadly. Major League Baseball has focused on diversity and inclusion initiatives in recent years, which led to a MLB Opening Day record: team rosters featured nearly 300 internationally-born players.

Team vs Team
Merchandise sales offer a window into the popularity of a sport. Baseball uniforms have remained relatively unchanged for 100 years, but 2020 saw Nike become the exclusive provider for Major League Baseball’s on-field uniforms. Their iconic “swoosh” is the most obvious non-team logo we’ve ever seen on MLB jerseys. Getting back to the Dodgers and the Rays, we see another drastic difference: as of September 25th, the Dodgers had three players in the top 10 of the most popular jerseys of 2020 while the Rays completely missed the top 20. But the national exposure that comes with a postseason rally should help boost those numbers, so time will tell the final score…

In the front office, the teams have very different budgets—the Dodgers have enough money to buy the Rays twice over. But there’s also a surprising mentor/apprentice relationship: Andrew Friedman, the Dodgers President of Baseball Operations, used to be the Rays General Manager under their current President, Matt Silverman. In this part of the David vs Goliath story, the underdog David trained mighty Goliath!

Despite all their differences, we do see some unique ties between these two baseball markets. Tropicana Field’s entry rotunda was modeled after the famous Ebbets Field where the Brooklyn Dodgers used to play until their move to Los Angeles in 1957. Or consider Hall of Fame player, manager, and owner Branch Rickey. Not only did he help invent the modern farm system and the batting helmet, he is best known for signing Jackie Robinson to the Brooklyn Dodgers in 1947. Before he became an owner, Rickey was the manager of the St. Louis Browns (now the Baltimore Orioles), who became just the second MLB team to ever move their Spring Training operations to Tampa.

On the Field
As the World Series opens, fans are excited for the elite pitching matchups, stellar defensive plays, and the Randy/Cody bombs. There is history between these two teams, but not a lot of direct competition. They have only met 17 times in the regular season, and never in the postseason. The Dodgers lay claim on the matchups so far, boasting a 10 – 7 record.

Due to COVID-19, the World Series will be played at Globe Life Field in Texas. This marks the first time since 1940 that a neutral site will host baseball’s championship. The teams would much rather play in front of their home fans, but at least they won’t have to travel the 2,550 miles between Dodger Stadium and Tropicana Field. Although local sponsors are missing out, the neutral site combined with MLB’s national sponsors should make this an appealing World Series for the average viewer. The broadcast teams should be able to fairly evaluate both teams while also giving exposure to the large nationwide brands making it possible to play this Series.

MLB’s national sponsors are getting more exposure through a longer postseason than previous years, including Taco Bell with their fan-favorite “Steal a Base, Steal a Taco” promotion. Per The SportsBusiness Journal, MLB may consider repeating an expanded postseason format it in future seasons given the success they’ve seen. Postseason sponsorship varies across sports per their collective bargaining agreements, but it appears baseball’s is the most notable considering the consistency across different games regardless of location.

There’s no true substitute for a hot dog at the ballpark, but we’ll light up some Kingsford and get some dogs on the grill for Game 1 tonight. Play ball!

Since we love to aggregate data to generate interactive insights here at KORE, we put together the Tableau Public dashboard below so you can explore the metrics we were able to find through our research. Having trouble loading the dashboard? Click here to view.

KORE is the global leader in engagement marketing solutions, serving more than 200 professional teams and 850+ sports and entertainment properties worldwide, providing practical tools and services to harness customer data, facilitate sponsorship sales and activation, and create actionable insights.

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Betting on Sports’ Return

This past May, the NFL opened the opportunity for betting companies to sponsor and partner with football teams. Casino partners have been allowed since late 2018 but this is the first official move towards allowing betting partners. The caveat here is that only those teams that reside in states where sports gambling is legal can partner with a betting company.

Earlier this month, the Denver Broncos made strides by becoming the first team to announce a partnership: a multi-year deal with FanDuel as “an official sports betting partner and an official daily fantasy partner.” In this partnership, FanDuel will now have access to Broncos brand marks and logos to use across their platforms in Colorado. Considering sports gambling only became legal and active in Colorado in May, this is a huge and fast first-step in tapping the local sports gambling market. In addition to the deal with the Broncos, FanDuel has partnered with multiple local casinos across Colorado since the gambling legislation was passed earlier this year, solidifying their position as a leading betting outlet in the area. 

Casino vs. Betting Partnerships

FanDuel is an official betting partner of the Broncos but this deal is not exclusive. The team has the opportunity to partner with other gambling companies to expand their gambling partnership category. 

When we think about the gambling category, it is typically split into two: Casino and Betting.

  • Casino partners are designed to introduce fans to a specific casino and its sportsbook
  • Betting partners are designed to build awareness of the brand and mobile app, an area where FanDuel thrives

The benefit for teams is to expand their gambling category portfolio and reach different groups of fans and bettors than they may reach in other industry categories. This partnership could lead to an in-stadium sportsbook, for example, and attract the type of casual fans that only watch sports if their money is on the line. 

Expanding Geographies

Sports gambling has only been legal outside Nevada since 2018 and the growth has been astronomical in the short history. Since legislation passed, 17 states have legalized sports gambling. The total known revenue kept by sportsbooks in 2018? A hefty $1.5 billion* per Legal Sports Report

Keep your masks on, folks, because we’re just getting started.

Thank you to everyone who has placed a (legal) wager on sports since 2018: $21.9B has been wagered, with sportsbooks keeping $1.5 billion in revenue. In the 18 months of legal activity, sports gambling-related taxes collected by states exceeds $200 million. 

The American Gaming Association (AGA) advocates states to adopt legislation in order to showcase the low-margin nature of sports gambling. The taxes generated vary state-by-state, but they come at low cost especially when mobile betting is an option. Let’s take New Jersey as an example – more than 81% of annual sports wagering revenue in the state came from online betting last year. Since 2018, New Jersey has generated over $60 million in tax revenue. 

With Nevada’s 200+ commercial casinos and decades of legal sports wagering, there is no wonder they are the overall gambling market leader in this country and around the world. To be fair Nevada has a “first to market” advantage and a well-established reputation. The first ever ‘over/under’ spread was posted 80 years ago, meanwhile sports gambling was only legalized across the country less than three years ago. To put their advantage in perspective, since 2018 Nevada has generated 22% more sports gambling revenue than the second highest state. In addition, the Las Vegas Strip has consistently more than doubled any other market (Atlantic City coming in second) in commercial casino revenue. The Strip in 2019 has generated more casino revenue than the next three market leaders combined. And yet, after just two years of legal activity, New Jersey is surpassing Nevada as the leading state in terms of sports gambling revenue. Online and mobile access in New Jersey can be attributed to their success. 

Between 2018 and 2019, sportsbooks across the country saw a combined increase in revenue of 177% and local governments saw tax revenue increase by 225%. There is an ethical component when discussing gambling which is a driving factor is state-by-state decision making on the legality. The AGA surveyed Americans about their thoughts on this and the results were astounding: Over the last two years, 88% of surveyed Americans consider gambling to be a fully acceptable form of entertainment. If sportsbooks are going to exist in stadiums, almost the same way Citi Field has a fully functioning Shake Shack, I would expect this number to climb even higher. 

A Tale of Two States

Two states in particular have piqued my interest research; Colorado, especially considering how quickly they are expanding gambling, and Pennsylvania, who saw a remarkable expansion in the market over the last year. 

Colorado

Personally, I have high expectations for the success of the FanDuel-Broncos partnership. While Colorado actually saw a 1% decline in overall commercial casino revenue between 2018 and 2019, I would expect that to change now that sports gambling has been introduced. Their largest area for gambling, Black Hawk, took responsibility of most of that decline. This is the same casino that struck a deal with FanDuel in May of this year, meaning they see the opportunity sports gambling provides and are betting on a new crop of bettors to frequent their casinos. There is a lot to look forward to in the coming years. 

Pennsylvania

In the same 2018 to 2019 period, Pennsylvania saw a 4.1% increase in commercial gaming revenue, with only 12 locations compared to Colorado’s 33. A major reason casino-goers were increasing their participation at other table or electronic games can confidently be attributed to sports betting. Pennsylvania saw over $111 million in sports betting revenue in 2019, compared to less than $3 million in 2018 when it was still new. PA’s online sportsbooks did not open until half-way through 2019 but they still accounted for over 60% of sports wagers. 

Let’s just think about that for a moment: Pennsylvania went from less than $3 million in 2018 to over $111 million in 2019, and online playbooks made up over 60% over that figure despite opening only halfway through the year. A 4,000%+ year over year increase in part of an industry does not sound too bad to me. Sports gambling only made up about 3.3% of the commercial casino’s revenue in 2019, showing how the low margins of sports gambling can result in new customers and a positive impact on the overall casino. 

What’s Next?

With FanDuel’s two partnerships (Denver Broncos and Black Hawk Casinos) in Colorado, they’re creating a bridge for fans to experience a new form of entertainment, and also giving teams an opportunity to see new fans that clearly have an affinity for entertainment (i.e., gambling). According to the AGA, nearly half of American said they planned to visit a casino over the next year, some of which I’m sure are not day one sports fans but still enjoy the entertainment of gambling. 

Commercial casinos still blow sports gambling out of the water when comparing revenue streams, but sports partnerships with both casino and betting partners is a rare win-win-win scenario. Looking back at Pennsylvania, the state credits sports gambling for contributing to more table game participation. While the percent of sports gambling revenue compared to the overall revenue of a commercial casino was only 1.5% in 2018, that percent has already doubled for 2019. When partnerships like the Broncos & FanDuel are created, they leave an opening for a casino to capitalize on new markets to tap into.

Where else are there passionate enough customers that wear the clothes of their local entertainment company? I have seen more Dolphins attire at Hard Rock Stadium than Hard Rock apparel at an actual Hard Rock casino.

Since we love to aggregate data to generate interactive insights here at KORE, we put together the Tableau Public dashboard below so you can explore the metrics we were able to find through our research. Click here to view.

KORE is the global leader in engagement marketing solutions, serving more than 200 professional teams and 850+ sports and entertainment properties worldwide, providing practical tools and services to harness customer data, facilitate sponsorship sales and activation, and create actionable insights.

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