NHL’s partnership puts dollar value on data
Monday morning the National Hockey League partnered with Las Vegas-based casino and resort titan MGM to unveil the league’s first-ever sports gambling partnership.
The NHL agreed to sell data to MGM, who plan to use the information to create a suite of new NHL-focused options for prospective gamblers. And if you’re surprised at the speed with which commissioner Gary Bettman has transformed from staunch gambling opponent to business partner with one of the biggest casinos in the gambling capital of the U.S., that’s reasonable. But it’s not unexpected, given the importance sports teams and leagues place on advanced data, and the pressure sports properties face to tap into new revenue streams.
In May the U.S. Supreme Court lifted the federal law prohibiting sports betting outside Nevada, enabling individual states to legalize sports betting and setting the stage for new alliances between casinos and major sports operators, with payoffs for both parties. A survey commissioned by the American Gaming Association estimated that the four major U.S.-based sports leagues could bring in a combined $4.2 billion annually in gambling revenue.
Where the NHL deal gives MGM a chance to offer unique hockey-related bets, the NHL receives a fee from the casino, plus other long-term opportunities to get paid. In theory, fans will watch more hockey for longer stretches if they have a stake in the outcomes of games and the events within them.
“If you’re collecting this data why not share it with gambling interests, especially if you can generate some revenue?” says Stetson University sports marketing professor Scott Jones. “The indirect effect is that you hope there’s more people wanting to watch games, and that money ultimately comes back to (the NHL) through media rights.”
This deal, like several other industry trends, hinges on data.
MGM executive Scott Butera says access to new stats will allow his company to broaden betting options beyond traditional categories like win-loss and over-under. “If I’m betting on who will score the most goals, I have that tool,” he told media on Monday “Ultimately when enough data is collected on that, we’ll be able to actually bet on that data itself. So you could have a bet on which player’s going to have the highest average slap shot throughout the game.”
In several European countries, gambling is fully integrated into the business of pro sports. This season the Toronto Wolfpack competed in the Rugby Football League’s Championship division, whose title sponsor is the online bookmaker Betfred.
And in North America sports like boxing and mixed martial arts have long hosted their biggest events in Las Vegas, and permitted fighters to solicit partnerships with gambling outfits. In 2001 middleweight champ Bernard Hopkins entered the ring for his bout against Felix Trinidad with a temporary tattoo etched across his back advertising the online casino GoldenPalace.com.
Among major team sports, the first National Basketball Association edged in the direction of mainstreaming gambling in 2002, when the Mohegan Tribe bought the Women’s NBA’s Orlando franchise and relocated it to the Mohegan Sun Arena, on the campus of a major casino. Five years later the NBA hosted its all-star game in Las Vegas, and last fall the NHL became the first major league with a franchise there.
Monday’s deal deepens the bond between the NHL and Las Vegas, and illustrates how quickly gambling has moved in from the fringes of the U.S. pro sports scene.
“Having a direct relationship with an MGM gives us the ability to have more control over the types of bets that are being placed and how the data is being used,” Bettman told CNBC on Monday. “Which is vitally important to us and we assume the players.”
It’s still unclear how a deal between a New York-based league and Las Vegas-based casino chain will affect the sports and gaming industries in Canada, where a critical mass of NHL fans lives. That Sportsnet carried the announcement live signals hints that the NHL’s main broadcast partner views the arrangement as big news north of the border.
But single-event sports betting remains illegal in Canada. A bill to legalize it stalled several times since it was first introduced in 2011, but Canadian Gaming Association president Paul Burns hopes the NHL embracing lawful gambling will spur action here.
Burns estimates out that Canadian bettors spend $14 billion annually betting on sports via off shore websites, and suggests the federal government emulate the NHL by accepting the trend instead of fighting it.
“There’s billions of dollars going to illegal channels, and maybe we can repatriate some of it,” Burns said. “It’s not dissimilar to the argument the government used around cannabis. A product enjoyed by millions of Canadians who spend billions of dollars illegally to obtain it.”
For Jones, the NHL-MGM partnership reflects a realization that with widespread legal pro sports gambling, data are more valuable than ever and that transparency could actually prevent betting scandals. He says leagues are better served by selling the data to a gambling industry partner than risking theft by a hacker, who could game the now-legal sports gambling system with the new information.
“If someone is hacking into a system and accessing that data, that’s when it becomes problematic,” Jones said. “If I’ve got this data, it’s best just to release it. When it becomes advantageous is when only have a handful of people have access.”