The announcement regarding the multi-year official betting partnership is itself far from unique. PointsBet is now the fourth official sports betting partner for the NHL after signing deals in late 2019 with BetMGM, FanDuel, and William Hill.
PointsBet itself is also promiscuous when it comes to sporting partnerships. It now has a range of official betting partnerships with leagues – it is also a partner with the NBA – and teams including the Indianapolis Colts and Chicago Bears, to name just a couple.
But what made this deal different was the small share stake that came as part of the package; a slug of equity worth $500,000.
No Big Deal
Of course, PointsBet and the NHL were full of the usual platitudes about the deal.
“As the sports-betting landscape evolves at a rapid pace, we continue to develop unique, strategic alliances within the sports gaming industry,” said Keith Wachtel, NHL Chief Business Officer, and Senior Executive Vice President, in the press release. PointsBet, meanwhile, said it was excited about the opportunity to “further elevate fan engagement.”
As various commentators were quick to point out on social media, the NHL’s enthusiasm strikes a very different tone towards betting than was the case just a few years ago. It was signposted at the time of the deal with William Hill in May 2019 when NHL commissioner Gary Bettman said, “times have changed.”
“What we’ve learned is that (sports gambling) is another point of engagement for the fans,” he added. “Ultimately, I think if you’re interested in sports betting, you’re going to have an increased opportunity to engage with the game. If you’re not interested, it shouldn’t impact the way you consume the game. And if you’re a sports fan who may not necessarily be a hockey fan, it will give you an opportunity, potentially, to sample something new.”
Are these Sports Betting Partnerships Inviting Controversy?
But is there more of an issue in having a stake in a betting firm in the first place? Sources in the UK pointed out that with gambling sponsorships now in the anti-gambling lobby’s sightlines, such a close partnership between a league and a betting company would be clearly off-limits. “But this is the US, and things are heading in the other direction,” said one sector analyst.
There are precedents, of a sort. The NBA’s previous investment in FanDuel, for instance, although it should be pointed out that was pre-the fall of PASPA when FanDuel was just a DFS provider. Meanwhile, Robert Kraft, owner of the New England Patriots, owns a small chunk of DraftKings – a holding which also pre-dates the PASPA repeal – as does Jerry Jones, his counterpart at the Cowboys.
Even though none of these are direct stakes on the part of a league, you don’t have to be a member of the tin hat brigade to see potential issues. That fan engagement is, after all, a two-way street. How much will fans be aware that the NHL might be profiting from their losing bets? Are there integrity questions raised by the PointsBet stake, however minor?
And to What Effect?
A broader question is about the rush to cash in on regulated sports betting. Rarely does a week go by without the announcement of a new partnership or sponsorship deal between a league/team and a sports betting operator.
As mentioned, PointsBet has itself signed some eye-catching deals. And yet, to what effect? For all the excitable press releases, the benefits to the company from all these partnerships are arguably limited
The most recent results from PointsBet suggest it is struggling to bring in bettors. In the second quarter of its financial year, the company said it only had 68,000 actives in the five states in which it is so far active.
Admittedly this represented a 200%-plus increase from the previous year. But it is still a low base and calls into question the strategy at PointsBet. The company is pinning its hopes on the League stamp of approval carrying weight with potential bettors, but the evidence for such a draw is, shall we say, limited. That is to say, there isn’t any. At least not yet.