Report: Verizon Eyeing Move into Sports Betting

Verizon sports betting

Verizon Communications is reportedly eyeing its options regarding sports betting as the Supreme Court weighs a case that could see the activity legalized later this year. If the Supreme Court rules in favor of New Jersey in its challenge of the constitutionality of the national sports betting ban, it will open the doors to legalization on a state-by-state basis across the USA.

In a piece published yesterday, Bloomberg cited anonymous sources familiar with the matter who claim Verizon “has been meeting with experts and consultants to assess the potential for a sports-focused online gambling venture” if the federal sports betting prohibition is lifted.

This was surprising to learn, but it does make sense. Verizon is certainly well-positioned to consider such a move. The telecommunications giant doesn’t just have the world’s largest mobile network, but also has the third-largest daily fantasy platform thanks to its takeover of Yahoo last year in a $4.5 billion deal.

Yahoo Fantasy Sports ranks a distant third behind FanDuel and DraftKings in terms of users, but it still boasts “tens of millions of users” who collectively spend 30 billion minutes a year managing their fantasy teams, according to Bloomberg.

Verizon has expanded into digital advertising recently, having launched Oath in 2017. Former Verizon acquisitions including Yahoo, AOL and the Huffington Post among others now operate under the Oath brand, which already has a potential reach of up to 1 billion consumers.

Bloomberg also notes that Verizon already has streaming video deals with the NFL and NBA to bring live games to fans on the go. We only have to look to the popularity of in-play betting over in the UK to see the potential here should Verizon enter the sports betting market armed with not only its massive reach, but with live sports streaming deals already in place.

Of course, this all hinges on the federal sports betting ban being rescinded one way or another. The most likely path for that to happen in the near future is the Supreme Court ruling in favor of New Jersey this summer. If the Supreme Court does side with New Jersey, it would open the doors for other states to legalize and regulate sports betting on a state-by-state basis.

It’s also worth noting that Verizon has not confirmed the report. In an interview with Bloomberg, Verizon CFO Matt Ellis said this:

“There are some changes coming that we pay attention to. We stay close to that to see how it would affect our asset and how we may choose to respond. I’ve not looked at anything in detail. If someone has an idea around it, I’ll look at it like any other. But we are not getting ahead of ourselves there.”

Growing Support for Legal Sports Betting

A ruling against New Jersey would set the effort back significantly, but momentum is building for legal sports betting regardless. If the Supreme Court does not take New Jersey’s side, any chance of repealing the federal sports betting ban would rely on Congress taking action.

Interestingly, the major sports leagues may support such an effort even as they are currently battling New Jersey in front of the Supreme Court. The NBA, for example, has challenged New Jersey’s sports betting efforts every step of the way and is one of the major sports leagues named in the case challenging New Jersey despite the league officially coming out in favor of legal sports betting.

In November, news broke that the NBA is planning to lobby Congress to legalize sports betting. If that seems odd given the league’s stance in the Supreme Court, it’s because the NBA does not actually oppose sports betting; it just opposes the state-by-state approach. The NBA would rather have Congress submit legislation to legalize and regulate sports betting at the federal level.

Unleashing Pent Up Demand

The end of the national sports betting prohibition via either approach would unleash enormous potential in the United States.  The American Gaming Association, for example, estimates that Americans already wager $154 billion on sports through illegal bookies and offshore betting sites every year.

Additionally, a previous report from Eilers & Krejcik Gaming, LLC estimated that up to 32 states could potentially legalize sports betting within five years of a favorable Supreme Court ruling. In the best case scenario, that sets up a market capable of generating up to $6 billion in revenue per year in fairly short order.

That same report also estimated that if all fifty states were to get on board and legalize sports betting, the total market would generate upwards of $245 billion in total betting handle every year to produce revenues of nearly $16 billion per year.

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