Even those of us in the sports betting space could not have predicted how 2020 would unfold. Yet, with stadiums closed and sports TV ratings declining all fall, betting has, in fact, been the sports biz bright spot of 2020. A historically packed sports television calendar, fans locked down at home, the acceleration of state legalization and a growing audience of new bettors have conspired to create an industry worth tens of billions in the span of just months. And we at the Action Network have seen this from the moment it started.
Since the Supreme Court overturned the Professional Amateur Sports Protection Act (PASPA) in May 2018, the growth in sports betting has been staggering. New Jersey was the first new state to offer sports wagering and more than 20 other states have subsequently legalized sports betting, with the total handle nationwide nearing $30 billion. The majority of that comes from the seven states where online betting has been available (also known as S.W.O.B.A., the acronym affectionately used at Action Network). Tennessee launched online betting on Nov. 1, and Virginia and Michigan will enter the S.W.O.B.A. canon within the next few months. As more states grapple with COVID-driven tax shortfalls, the number of S.W.O.B.A. states and the size of the handle will only grow.
Leagues, Rights Holders, Teams
With each passing week, the major sports leagues get increasingly comfortable with sports betting partnerships and content. The Action Network has partnered with two of the more forward-thinking leagues and rights holders in the PGA Tour and NBA. Earlier this year we rebranded our golf content and data “GolfBet” in partnership with the PGA Tour. We also partnered with the NBA to produce a BetCast feed for the restart this past summer. It was extraordinarily well-received by fans, and we expect every league and rights holder to deploy similar experiences in seasons to come.
Meanwhile, teams like the New York Jets, New Jersey Devils and Philadelphia 76ers have already signed lucrative sportsbook partnerships. On the media side, CBS, ESPN, WarnerMedia’s Bleacher Report and nearly every major media company have signed eight- to nine-figure deals with the leading sportsbooks. We expect to see more deals, especially in the media space, as sportsbooks look to convert customers in growing S.W.O.B.A. markets. The most emergent source of revenue for sports media companies is affiliate fees, which has grown rapidly despite mobile sports betting being available to less than 15% of the U.S. population. By driving their platforms’ users to legal operators in exchange for hefty referral fees, digital media companies have the opportunity to diversify revenue, which will only become more important due to the digital advertising depression driven by the pandemic.
Sophisticated sports bettors, not unlike savvy private and public market investors, make decisions using data. They use sportsbook aggregator feeds, odds widgets and every available resource to shop for the best prices and odds. As the betting market matures and bettors of all levels look to gain an edge, they will increasingly need to rely on data-driven resources to make these decisions. The Action Network has nearly two decades of data, tools and systems to inform the data-driven sports bettor.
Data is output for our users and subscribers, but it’s also a critical input that informs the products Action Network builds and the content we produce. The most powerful data platforms in consumer media and technology are Google, Facebook and increasingly Amazon. The value of these platforms is rooted in their ability to understand first-party user data at an unparalleled scale and use it to improve their business and make the customer experience more efficient. First-party user data is critical to the success of any modem digital consumer media platform. Sports betting is no different.
The foundation of our app is a user’s ability to track picks. In real-time, the bettor gets a visceral thrill from seeing the percentage chance his or her bet will cover the spread. But it’s also a valuable long-term tool. Over time, bettors tracking picks will be able to analyze their history of bets, see when they win and when they lose, and make more informed decisions going forward. We also developed a technology called BetSync, which allows bettors at partners such as BetMGM, PointsBet and Parx to automatically sync their bets from those sportsbooks with our app, creating a seamless tracking experience.
Over the past two years, our app’s pick-tracking tool has tracked nearly 100 million picks. Since launching BetSync this past summer, we’ve learned that those users are the most engaged on our platform, averaging 16 bets per week at nearly $75 per bet. Between pick tracking and BetSync, we are confident we will have the largest first-party sports betting data platform in the industry.
The Sports Bettor
Not surprisingly, the number of sports bettors is rapidly growing, with more than 40% of sports fans having bet on sports in the past 12 months, according to a 2020 Activate Consumer Tech & Media Research study. Action Network’s audience has increased nearly 100 percent year over year, and since the return of sports in July we’ve seen new audience highs each month. Also not surprising: Sports bettors are some of the most engaged users of any mobile content genre. Our users are spending an average of 123 minutes per month in our app.
Engaged sports bettors? That’s at least one 2020 story everyone could predict.
Patrick Keane is CEO of sports betting data and information company The Action Network. Previously, he has served as CEO of Associated Content, executive vice president and chief marketing officer at CBS Interactive and director of advertising sales strategy at Google. Keane is an operating partner of Stripes, focusing on digital media, marketing and consumer internet brands, and he represented Stripes as a board director of portfolio company Gimlet Media. He also previously sat on the boards of IAB as well as Bleacher Report, working with the latter on M&A, marketing, advertising strategy, and operations. Keane was named to the Ad Age 40 Under 40 list and was twice named to the Silicon Alley 100.