What Are Sports Betting Sponsorships?
Have you ever wondered how sports betting companies make their money? One of the primary ways that bookmakers stay afloat is sponsors, but what are sports betting sponsorships?
We’ve put together this comprehensive primer so that you can find out about them and how they affect your sportsbook.
🔑 Key Takeaways
- Discover the history of sports betting sponsorships.
- Learn how sports betting sponsorships impact bookmakers and bettors.
The Evolution of Sports Betting Sponsorships
A decade ago, the idea of professional sports leagues sponsoring sportsbooks seemed unrealistic. And admittedly, during that time, it certainly was. Over the past few years, however, with the legalization of sports betting in much of the country, more and more sports organizations and teams are partnering with bookmakers.
Known as ‘sports betting sponsorships’, these collaborations allow sports betting operators to advertise their services using the league or team in question. They can be quite lucrative for both bookmakers and sports teams.
Example: Yahoo Finance found that Caesars Entertainment’s partnership with the NFL brought in roughly 40m in 2023. Given the kind of money on the table, it’s no surprise that sports betting sponsorships are on the rise.
How Do Sports Betting Sponsorships Work?
Sports betting sponsorships are fairly easy to understand. Betting platforms and professional sports organizations or individual teams partner for mutual benefits.
The sportsbook is allowed to use the league or team’s name in advertising, including displaying its logo, and the sports entity takes some of the sportsbook’s earnings. The legitimacy of the sports team drives more bettors to the operator, which in turn funnels more money to the sports team.
Note that bookmakers must adhere to state-specific and federal laws regarding sports gambling regardless of their sponsor. The American Gaming Association explains this concept in more detail.
Types of Sponsorships in Sports Betting
There are three main categories of sports betting sponsorships to keep in mind:
- Team sponsorships
- League sponsorships
- Event sponsorships
Team sponsorships pair sports betting platforms with individual teams.
Example: In 2001, the Washington Capitals (NHL) announced a partnership with Caesars Entertainment. As part of the deal, the team’s jerseys were adorned with the Caesars Sportsbook logo. The bookmaker also began hosting a ‘hospitality space’, including VIP seating, at the Capital One Arena, home to the Capitals.
League sponsorships are independent of team sponsorships and refer to partnerships between an entire sports league and a sports betting platform.
Example: The NBA announced a collaboration with bookmakers DraftKings and FanDuel in 2021. Which granted the bookmaker rights to the league’s logo and name, both in live betting and daily fantasy sports betting.
Event sponsorships, as the name implies, are short-lived or one-time sponsorships that surround a specific sporting event.
Example: The 2024 Super Bowl included advertisements for both BetMGM and FanDuel. Both betting platforms brought NFL stars into the mix, with Tom Brady representing BetMGM and Rob Gronkowski working with FanDuel.
The Financial Impact of Sponsorships
We know that sports betting sponsorships are increasing in number and popularity, but we haven’t discussed their financial impact on bookmakers, bettors, and sports organizations. In short, these partnerships are incredibly popular specifically because of the money they make betting platforms and sports entities alike.
Think of the financial impact of sports betting sponsorships as a circle.
Initially, we have sports betting operators searching for new users and more visibility. In the end, we have sports teams and organizations looking for increased revenue.
Sponsorships drive more players to sports betting websites, increasing traffic and revenue, much of which is then sent to sports organizations.
The American Gaming Association is actively monitoring the rise of sports betting sponsorships. In 2024, it estimated the total revenue experienced by the four major sports leagues from sports betting sponsorships (both indirect and direct) to be more than $4bn.
With so much money at stake, the increasing popularity of this kind of partnership makes sense.
The Benefits of Sports Betting Sponsorships
The benefits of sports betting sponsorships are numerous for both the sponsors and the sports industry. Let’s take a look at some of the most prominent of them.
For sponsors:
- Increased visibility
- Influx of new bettors
- Mainstream approval
For sports organizations:
- Increased revenue
- Enhanced fan engagement
- Bigger online presence
Increased Brand Visibility
Both sports entities and sports betting platforms gain more visibility through sponsorships. Sports betting is a new industry in much of the US, and rules restricting gambling ads have only recently been relaxed. This means that sports betting platforms, with few exceptions, don’t have the strongest presence in the mainstream media. Sports teams and popular leagues, on the other hand, certainly do.
By promoting sponsors and easing betting platforms into the public eye, sports entities dramatically increase sponsors’ brand visibility. At the same time, their visibility is spreading among sports bettors, potentially bringing new fans their way.
Enhanced Fan Engagement
Sports betting sponsorships benefit sports teams and leagues by providing fans with another way to interact with the brand.
A 2024 survey found that an increasingly positive correlation existed between sports sponsorships and purchase intent. When sports betting fans surveyed were asked how often they would buy from companies sponsoring a sport or sports organization they like, 66% indicated that they were more likely to purchase from sponsors they like.
Bookmakers and the sports industry can both enhance this engagement by offering joint promotions and betting incentives. Fans who are offered a great bonus for their bets are more likely to engage with the sportsbook and wager. This, in turn, increases their consumption of the league or team in question.
The Challenges and Controversies Surrounding Sports Betting Sponsorships
While sports betting sponsorships have a lot of benefits for the sports industry, they are not without their fair share of challenges and controversies.
Regulatory Hurdles
While sports betting is legal in many states, it is not allowed in every region. Even in some regions where it is currently legal, legislators are calling for increased regulation of sports gambling promotions, which widely include sports betting sponsorships.
Sponsorships in the future may be more tightly regulated regarding public advertisements, including the print, digital, and legacy media spheres. More than that, however, upcoming legislation could make it more difficult for the sports industry to promote their sponsorships.
For instance, using betting platform logos on sports jerseys could very well be restricted in the future.
Ethical Considerations
Beyond regulatory difficulties, sports betting sponsorships are also at the center of multiple ethical debates, most prominently surrounding sports integrity and fan welfare.
When done irresponsibly, gambling can have devastating effects on social, emotional and financial well-being. There is growing concern that openly promoting online sports betting and normalizing it in everyday society could negatively affect fans.
Another concern that fans and regulators have is the influence that contract obligations or revenue considerations might have on the integrity of the sports industry.
If a particular team is on a losing streak, for example, how does the potential loss of fans and public appreciation impact sponsorships? And with revenue at risk, will players or officials be encouraged to engage in illicit activities to meet sponsor expectations?
The Future of Sports Betting Sponsorships
Sports betting sponsorships are still in their infancy. There is much room for growth, and new regulations and technological advancements stand to further revolutionize the industry. From improving player reach to more strictly regulating sports betting advertisements in certain markets, the future of sports betting sponsorships is certain to be an exciting one.
The Role of Technology in Sponsorships
Technology has a huge impact on the way that people bet on sports. Mobile betting, for example, is a relatively new concept that has made it easier than ever for sports fans to wager on their team or event of choice.
Technology also impacts how people wager on a more fundamental level. Live, in-game sports betting is a new wager type that’s only available because of advancements in streaming and accessibility.
Technological innovations like this stand to have a significant impact on sports betting in the future. From the way that users stay updated about their team or league’s performance to specific bet types they are allowed to make, sports betting sponsorships are on the cutting edge of fan and consumer engagement.
Potential Changes in Regulation
Because it is an emerging industry, regulations on sports betting sponsorships are developing rapidly.
A 2024 bill known as the SAFE Bet Act, for example, proposes various restrictions on sports betting advertising. This would make it significantly more difficult for the sports industry to effectively promote the sportsbooks sponsoring teams and leagues. This, in turn, would fundamentally change the way that sponsorships are conducted.
Frequently Asked Questions About Sports Betting Sponsorships
How do sports betting companies choose their sponsorship partners?
Sports betting companies consider many factors when deciding their sponsorship partners. Team and league popularity are perhaps some of the most important, but things such as player popularity and stats, states of origin, and sports betting legality in key regions are also crucial to keep in mind.
Are sports betting sponsorships legal in all regions?
Sports betting sponsorships are typically legal in regions where sports betting is legal. Bettors located in a state where wagering on sports is not allowed won’t be able to take advantage of the partnership. Some regions might also restrict gambling advertisements.
How do sports teams benefit from betting sponsorships?
Sports teams benefit from sponsorships in a variety of ways. These partnerships often allow sports organizations to secure better resources for players behind the scenes, including better gyms and equipment. Sometimes, they translate into increased revenue for individual players.
Can sponsorships influence the outcome of sports events?
While the growth of sports sponsorships is a boon for both sponsors and the sports industry, fans have concerns about the influence that these partnerships have on the integrity of sporting events.
The good news here is that not only are sponsorships held to certain regulations, but also all parties involved in them want to see the best performance possible from the athletes. Sports betting sponsorships cannot influence the outcome of events.