NBA teams gain more assets to sell to betting sponsors

By John Lombardo and Bill King
FanDuel is opening a sportsbook in Footprint Center, home of the Phoenix Suns.FanDuel

The NBA will loosen restrictions on team sports betting sponsorships next season, allowing them to drive value in the white-hot category while stoking fan engagement coming off a season of playing in mostly empty arenas.

The significant shift in strategy gives casinos and sports betting operators an array of new assets, allowing teams to sell more integrated and pricier deals. They still include restrictions meant to maintain the league’s approach of allowing fans access to sports betting without forcing it on them, providing divisions that lay out where and when sportsbook operators can promote.

The changes include allowing teams to post sponsored live odds and betting lines in betting lounges and club areas in arenas, an essential feature for sportsbooks that hope to use those spaces to attract and engage potential customers. But the league will continue to prohibit the display of odds in more broadly camera-visible locations, such as on center-hung video boards or at arena entrances.

It will allow teams to broaden that exposure at up to three games per season at themed sports betting nights, likely sponsored by sportsbooks. Content and execution on those nights must be approved in advance by the league.

“We look each year at what our teams are asking for, what our partners want to do, what we’re seeing in the broader sports betting marketplace and figure out what we should be doing,” said Scott Kaufman-Ross, senior vice president, head of gaming and new business ventures for the NBA. “It has always been our intention to take incremental steps in this category. It was only three years ago that this was prohibited activity outside Nevada. So we’ve tried to be diligent about not going too fast too quickly. It is about allowing sports betting fans to engage with each other. Our goals were really about fan engagement and testing and trying new things.”

The league also has clarified its policy on the highly visible floor apron signage that last year allowed teams to put daily fantasy and gaming companies’ logos on multiple positions on the floor apron, which created a blurring of categories.

This year, teams will be allowed to sell one floor apron signage spot dedicated to a sports betting or casino partner. No sports betting signage will be allowed on the actual playing floor and the apron signage will be for local broadcast games only. 

Teams will also be allowed to conduct in-arena sports giveaways by sports betting sponsors, mirroring long-standing promotions by sponsors that give away such things as free burgers and pizza when the team scores 100 points. Kaufman-Ross said it was too early to discuss whether sportsbooks might use that clearance to offer vouchers for free bets.

“Now they will go to the drawing board and figure out what they want to do,” he said.

All of this is part of the evolution that all leagues are dealing with as states roll out varied regulations that present a range of possibilities. Arizona, Illinois and Washington, D.C., allowed for brick-and-mortar sportsbook locations in sports venues, including Capital One Arena in Washington and Footprint Center in Phoenix. Caesars has a sportsbook at the home of the Wizards; FanDuel will open one through a deal with the Suns.

“These things unlock opportunities and engagement in gaming,” said Dan Costello, chief revenue officer and senior vice president of innovation for the Phoenix Suns. “The league guidance in allowing us to do this is so that it is not too intrusive. Beyond revenue, it is about engagement.” 

Regulations in the NBA, NHL, MLB and NFL all differ slightly in their treatment of those retail locations. Rules initially restricted NBA and NHL fans from coming and going from their seats to the sportsbook. The NBA relaxed that policy in Washington in time for the playoffs. MLB will restrict direct access from the seating bowl at Nationals Park to the BetMGM sportsbook planned for the ballpark. The NFL thus far prohibits stadium retail locations to operate during its games.

Of course, fans can place bets from their mobile devices at all those facilities, as they do in states that have not granted licenses to arenas and stadiums. In those states, many teams are selling sportsbook sponsors on branded betting lounges, typically in converted arena and stadium sports bars, with screens that show updated lines and odds, and customer service reps to help patrons open accounts. The NBA’s latest rules clear the way for those betting lounges to operate as intended during games.

“A lot of these things are targeted at being able to, in the arena, create community around gaming. If there are people that want to huddle around the TVs and watch a game and bet on a game from their mobile phones, they have places in the arena to do that,” said Kaufman-Ross. “It’s more about allowing our sports betting fans to engage with each other, with their apps, with the games, through that lens than it is ‘Here’s the line on the center hung’ and just having that piece of inventory.”

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