Barstool Sports is doing it. So are theScore, Fox Sports, and Vox Media. In the past few months, digital publishers have started entering the sports betting business at a rapid clip. Some companies, like The Chernin Group, have even formed new media businesses dedicated to covering the sports betting market.
The trend has left many people wondering, what’s behind the rush of publishers entering the sports betting business?
To find the answer, you need to look all the way to the Supreme Court. Back in May of 2018, the Supreme Court overturned a ban on sports betting outside the state of Nevada. The state of New Jersey legalized the industry just a month after that.
The Supreme Court’s decision, coupled with New Jersey’s decision to legalize the sports betting business, created a new opening in the market that digital publishers have stepped right into.
Digital publishers are always on the hunt for new revenue streams. Subscription and membership programs, online advertising, ecommerce sales, and live events are just a few of the ways digital publishers have worked to monetize their businesses over the past few years. When the Supreme Court overturned the ban on sports betting outside Nevada, a new potential revenue stream opened up for digital publishers.
Because of the topic and the demographic of potential “players,” sports publishers are well positioned to capitalize on the sports betting trend. While some companies, like Fox Sports and theScore, have rolled out sports betting apps, companies like Barstool Sports and Vox Media are launching standalone sites. Barstool’s standalone sports betting business is called Barstool Bets. Vox Media entered the market by launching a sports betting publication together with DraftKings, which it calls DraftKings Nation.
For digital publishers who cover sports, launching a sports betting business is almost a no brainer. Sports betting is a natural extension of the topic they already cover, similar to the fantasy sports leagues that publishers were launching en mass a few years ago.
Rather than using the information they learn from a publisher’s articles or videos to inform the bets they make on other platforms, publishers are keeping it in-house when they launch their own sports betting businesses. This isn’t just a one-way street, either. Not only are sports media companies funneling readers to their sports betting platforms, they are also funneling people who use their sports betting platforms back to their sports news websites. The combination of content and gambling is helping encourage audience growth, engagement, and retention.
The synergy between sports betting and sports news is one of the reasons why companies like DraftKings, which is primarily known as a sports betting platform, have been eager to enter the media industry.
Of course, there are downsides to this type of project. For starters, sports gambling is still a highly regulated industry. That means publishers should expect a fair amount of oversight and regulation. Staying on top of the latest regulations, and remaining compliant, usually requires an in-house team of experts.
How Do Publishers Make Money from Sports Betting?
Every publisher’s business strategy is unique. Traditionally, technology companies in the sports betting business charged a “spread.” The built-in profit margin that sports betting businesses use is similar to the house’s edge in a casino.
Media companies like Vox are taking a different approach. Vox is making money from DraftKings Nation by sharing revenue from online ads sales on the DraftKings Nation website. DraftKing already has a robust ad sales program in place, making it easier start generating a profit from its DraftKings Nation sports betting business.
Other publishers are hoping to generate revenue with programmatic advertising on their sports betting websites. However, there are concerns that some advertisers might not want to be associated with gambling-related content.
TheScore is not carrying ads on its sports betting website, theScore Bet. In an interview with Digiday, publisher John Levy said he believes revenue from the sports betting business will someday dwarf the revenue that his company sees from its core app.