Courtesy of Caesars, New Orleans Saints fans became the first in the U.S. to attend a game at a venue bearing the name of a sportsbook, the Caesars Superdome. With the National Hockey League allowing jersey patches starting in the 2022/23 season, Caesars locked up the first jersey patch sponsorship with an NHL team, the Washington Capitals. This was a relatively easy move for both parties, as the Caps’ Capital One Arena – which is also home to the NBA’s Wizards, the WNBA’s Mystics and the Georgetown University Hoyas – opened the first in-venue sportsbook earlier this year.
One guess who that pioneering sportsbook is.
If you said Caesars, you’re mostly right. When the Capital One Arena sportsbook opened in May, it bore the name of U.K.-based sports betting giant William Hill. Caesars had acquired William Hill a month earlier for $4 billion, with William Hill’s platform powering Caesars’ entrance into the sports betting market. By the end of summer, all of William Hill’s U.S. operations were under the Caesars name and Caesars had sold off William Hill’s non-U.S. assets.
The partnership between Caesars and the Capitals highlights the convergence of two revenue sources that are relatively new to American sports but well-established in Europe, particularly in soccer: shirt sponsorships and gambling. This convergence comes though, as some European countries – the U.K. in particular – are taking steps to disentangle the two.
The U.K. government is reportedly set to ban sports betting shirt sponsors starting with the 2023 season. Fifteen teams across the top two tiers of English soccer – the Premier League and the Championship – have sportsbooks as their shirt sponsors, with revenues from those agreements reaching an estimated $137 million. The Championship itself is sponsored by a sportsbook, SkyBet.
The ban is the result of a growing campaign by politicians, regulators and lobbyists to draw attention to the increasing numbers of “problem gamblers” and the negative effects of ubiquitous betting advertisements on the sports culture.
Although most team and league executives oppose the ban, several team owners and chairmen have said their teams can do without the revenue and the sport will be better off without Betway, bet365, Fun88 and all the others across players’ chests. These voices are notable because they are from clubs like Tranmere Rovers, Forest Green Rovers and Lewes FC, far down the pyramid from Manchester United and Chelsea. Lower-tier clubs had a much more difficult time staying afloat during lockdowns and thus might not be expected to close the door on any potential revenue stream.
When the ban is finalized, the U.K. will join Spain in forcing teams to look for sponsors outside of the betting industry. Spain made its move in October 2020, banning all forms of gambling sponsorship. At the time, seven of the 20 clubs in Spain’s La Liga soccer league had betting companies as their shirt sponsors and sportsbooks accounted for approximately $100 million of annual revenue across the league.
Spanish soccer provides an interesting episode in the intersection of sports, gambling and ethics. In 2010, a member of the Qatari royal family purchased Malaga CF, then in Spain’s third tier. Malaga’s shirt sponsor was a sportsbook, which conflicted with the new owner’s Muslim faith. Shortly after buying the team, he ended that contract.
Malaga’s short-lived shirt sponsor? William Hill.
The legalization of sports betting in the U.S. has progressed in tandem with improved perceptions of the gambling industry as a whole. Fifty percent of Americans had a favorable view of the industry in 2020, up from 31 percent a decade earlier. In 2017, half of Americans supported legalized sports betting in their states. That percentage rose to 78 percent just two years later.
Maybe that shows a long-standing latent demand, or perhaps it demonstrates how fickle the market can be. Americans’ views of legalized sports betting were in the abstract until 2018. Only this year have they started to experience betting lines and odds talk as part of their favorite sports shows or game coverage, sportsbook-branded venues and sportsbooks along the concourses of those venues. Teams, leagues and media outlets are betting on sports gambling enhancing the experience for all fans, not just those interested in getting in on the action.
The U.K.’s action against sports betting sponsorships should be another of what TicketManager called in a recent blog post a “small but not insignificant flag for the sports and entertainment marketing industry in terms of a slippery slope that could lead to calls to ban partnerships” with disfavored industries.
Who’s to say it couldn’t or won’t happen here?
How will American politicians, community groups or activists respond to any of the negative effects that the English are now attempting to correct? How will teams and leagues respond to those who think the U.S. should learn from Europe’s example and take a proactive approach to regulating – perhaps to the point of proscribing – highly visible sportsbook sponsorships? People who oppose or at least caution an incremental wait-and-see approach may not want to replicate the full 16-year experiment the UK had. They may want to act now before it reaches the perceived tipping point in Europe.
The discontent with sports gambling in the U.K. traces back to the Gambling Act of 2005. That 16-year window is an instructive benchmark, as the naming rights deal between Caesars and the Superdome is 20 years, $200 million.
The real winners of the sportsbook sponsorship game might not be the first to go big and be seen, but the first to figure out where and how loudly Americans want their sportsbooks to be part of their sport culture and fan experience.