A Year After Court Decision, TV Networks Are Placing Their Bets On Gambling

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A year ago today, the U.S. Supreme Court wiped out a federal law barring sports betting in any state other than Nevada. Now, TV networks are beginning to show their hands as they bet on how to integrate gambling into their programming.

The latest news: ESPN named Caesars Entertainment its official supplier of odds data across the Disney unit's TV and digital platforms. You'll start seeing Caesar's branding on ESPN programming soon. Next year, you'll also see an ESPN production studio carved out of Caesar's Linq casino, where gambling-related content will be regularly produced.

Bleacher Report, owned by AT&T's Turner unit, previously signed a deal with Caesar's to build a branded production facility, this time in the casino company's original eponymous space. Caesar's is already the NFL's official casino. 

Last week, 21st Century Fox and The Stars Group announced the Fox BET partnership, which will create apps for both sports gambling and free-to-play contests.

That deal, which could last as long as 25 years, gives the reshaped Fox an option to buy up to 50 percent of Stars Group, which has a range of gambling products but hasn't previously made much headway in the U.S. market.

Fox BET will launch two apps by fall. A free-to-play app will give cash prizes to players who correctly pick game outcomes, and is considered less intimidating to novices. Consider it something of a gateway drug for newcomers. A second app will be available in states where gambling is legal, to allow people to make live bets on a range of sports.

The court decision's anniversary also comes less than two weeks after Sinclair Broadcast Group won the auction for 21 regional sports networks, for a total price of $10.6 billion (Byron Allen partnered with Sinclair on the acquisition). The price tag, though hefty, was still well below analysts' expectations, and sent Sinclair shares up 30 percent in a day.

Disney had acquired the RSNs as part of its $71.3 billion acquisition of most of Fox, but regulators required it to divest the networks so the rest of the deal could go through.

Sinclair also has partnered with Amazon, the New York Yankees and a private-equity fund to buy the balance of the YES Network, another of the Disney RSNs. Separately, Sinclair partnered with the Chicago Cubs on the launch, coming next spring, of the Marquee Sports Network.

Sinclair CEO Chris Ripley said during the company's subsequent quarterly earnings call last week that gambling will be a major opportunity for his company to drive new revenue streams, especially when ATSC 3.0 technologies fully arrive over the next few years.

Company executives said they anticipate weaving some non-game content from the RSNs into programming on STIRR, the company's ad-supported online streaming service built around its stations' local news and sports programming.

Separately, Sinclair also owns several other sports properties, including the Tennis Channel, Ring of Honor Wrestling and Stadium, a streaming-video network that is also available on STIRR among other outlets.

All the media companies are betting that legal sports gambling soon will be widespread around much of the country.Most of the major sports leagues already have embraced at some level the potential of gambling, particularly in-game, to shore up crumbling ratings on traditional broadcast and cable partners.

The leagues' biggest objections to legalization now seem to be a desire to scrape off an "integrity fee," essentially a portion of the gambling revenues or "handle," to make sure they make money from the newly legal gaming around their games.

Expect similar conversations to grow around esports as well as it continues to thrive. Over the weekend, Disney's ABC network televised the Overwatch League playoffs, just one example of major traditional media companies embracing the sport.

Seven states have already joined Nevada in allowing sports betting, led by New Jersey, lucratively wedged between the big markets of New York City and Philadelphia, with their ardent sports fan bases, as well as the state's own long history of casino gambling in Atlantic City.

Five more states are scheduled to begin taking bets later this year. All but six states have at least pending legislation under consideration.

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https://www.forbes.com/sites/dbloom/2019/05/14/a-year-after-court-decision-tv-networks-are-placing-their-bets-on-gambling/#33ee1b4b7236