(L.E.K. Consulting is a proud partner of Front Office Sports)
Sports industry stakeholders acknowledge the potential to drive greater sports engagement through recently legalized betting in the U.S. The trick, of course, is understanding which strategies are most likely to resonate with consumers over the long haul.
In this article, consider the appeal of legalized gambling to sports fans and how it could conceivably boost sports interest in general, and among finicky millennials in particular.
Before becoming a multimillionaire in a single month on Jeopardy, Las Vegas-based James Holzhauer had spent the previous decade working as a professional sports gambler, using his knowledge of stats and his uncanny predictive abilities to good advantage. Oddly enough, until recently Holzhauer’s occupation would have been deemed unlawful anywhere besides his home state, thanks to 1992’s Professional and Amateur Sports Protection Act, which prohibited sports gambling outside of Nevada.
In 2018, however, the Supreme Court overturned that statute, paving the way for fully legalized gambling at both the professional and college levels throughout the U.S. To date, sports betting has been greenlighted in a handful of states, with others likely to pass legislation over the near term.
Against this backdrop, broadcasters, leagues, teams and other players have been eager to reap new opportunities available through gambling, including both direct and indirect benefits. To achieve success, it is important for stakeholders to determine those strategies most likely to appeal to a broad range of consumers.
More tuned in
In their research, L.E.K. Consulting found that legalized sports gambling is primarily attractive to sports fans who already gamble in some capacity (some 47%, compared with 23% of casual gamblers and 29% of non-gamblers). That said, when taking into account all fans (from current sports gamblers to non-gamblers), legalization could lead to an 84% rise in sports gambling participation, from 10% of sports fans at present to 18% post-legalization (see Figure 1).
The good news for industry stakeholders: Whether committed or casual, all participants are likely to become more sports-oriented as a result of an increase in regulated gambling. According to our survey, both current sports gamblers and those likely to take up gambling reported a similarly strong anticipated rise in sports engagement (roughly 37% and 39%, respectively). Sports fans surveyed report that interest will be driven primarily by televised sports viewing (73%), along with recap videos (40%) as well as sports articles and related content (36%). Even ballpark attendance could get a boost from betting (23%) (see Figure 2). Furthermore, as betting becomes increasingly mainstream, it will likely appeal to a wider audience than current alternatives such as fantasy sports.
For U.S. stakeholders seeking evidence of sports gambling success, one need look no further than the U.K., where online sports betting revenues have more than tripled over the past 15 years and are expected to escalate well into the next decade. This advance will be fueled in part by stronger mobile-betting uptake, with gross winnings forecast to nearly double through 2023.
The millennial challenge
But what about the perpetually reticent millennial demographic? Indeed, bringing these consumers into the fold will not be an easy task, particularly given their reputation for sports detachment relative to their older peers. Not that millennials are out of reach, however, and in the next installment, see recent data suggesting why younger constituents could in fact represent a prime target for savvy sports stakeholders.
The research and insight provided in this article were provided by Alex Evans, Robert Haslehurst and Geoff McQueen of L.E.K. Consulting. For more of their executive insights, please visit their website.