JP Morgan: US sports betting market could hit $9.2bn by 2025
Wall Street heavyweight releases new 33-page report into sports betting opportunity through deepened ties with US broadcasters
The US sports betting market could be worth $9.2bn by 2025 according to a new report by JP Morgan.
The Wall Street banking giant asserted significant growth could come from US states which have not yet rolled out online sports betting, including New York and California.
The report suggests the biggest growth would come as a result of sports betting operators deepening ties with US media firms.
“Media networks are only scratching the surface when it comes to the value they can drive for betting platforms,” analysts wrote.
JP Morgan said these ties lend credibility to gambling operators while also driving potential bettors to operators. It suggests tier-one operators including FanDuel and DraftKings may pursue more media partnerships if smaller operators end up gaining market share through similar deals.
“To the extent smaller operators can successfully leverage media for market share, we think this will put more pressure on the entire industry to pursue similar arrangements,” the report said.
JP Morgan said the integration of betting into live sports broadcasts would also be a key way to boost advertising revenue from operators and affiliates as viewing figures increase.
“The greatest opportunity for sports networks, however, is to integrate betting content where it can reach the largest and most engaged audiences, which is during live games or immediately preceding them on studio shows,” the report said.
“While the nature of a public telecast makes betting exclusivity difficult, sports networks could sell sponsorship and integration rights for these unique events, and even provide exclusive streaming video into platforms,” analysts added.
The New York-based investment bank referenced several clear frontrunners in sports betting broadcasting from its own portfolio, including ESPN, Sinclair, CBS and Fox, all of which have actively signed deals with operators including Bally’s Corporation, William Hill, and Flutter Entertainment.
Discussing Fox and its relationship with Flutter-owned Fox Bet, JP Morgan suggested the US broadcaster might look to buy Flutter’s stake in joint venture platform and take full control of the brand.
“[Fox], in our view, has been given little credit for its long-term value potential in sports betting, though we think that could change with exercise of either option, something that may occur once the company has better visibility on future NFL rights costs,” the analyst wrote.
Regional broadcaster Sinclair, which signed a 10-year partnership with Bally’s in November, was also singled out by JP Morgan as a potential big winner.
“Sinclair in our view has taken the most aggressive stance when it comes to the potential presentation of sports, identifying the convergence of media and betting – coined gamification – as a megatrend it expects to pursue,” the report said.