A little over a month ago we noticed the huge amount of exposure new legalized online gambling sites were getting in New Jersey. You could not go a few miles on a major highway without seeing something for Betfair or any of a number of other sites, and given the fact that sports teams in Canada…the Raptors, the Maple Leafs and the Canadiens…were already calling Poker Stars.net a partner with prominent advertising, it seemed like just a matter of time before a franchise like the Devils started to cash in…literally…with one of the online sites now legal in the market. What we didn’t realize at the time was that it didn’t have to be a team that was located in the State, one that televised into the market was also OK to partner with, so the opportunities for the deep pockets of the online sites expanded exponentially across the Hudson and the Delaware at least.
On Thursday at the Prudential Center, the convergence of team ownership on both sides of the border river to the South of the State, Josh Harris’ tandem of the Devils and the Sixers spearheaded by President Scott O’Neil, broke the logjam and announced what was billed, and truly is, a historic partnership between partypoker, run by the UK gambling house Betwin, and the two teams, making partypoker the Official Online Gaming partner of the Philadelphia 76ers, New Jersey Devils and Prudential Center. This multi-year deal in the online gaming category is the first of its kind for US-based sports organizations and signals a continued commitment by both franchises to create and foster partnerships with the world’s best brands. Welcome to the billion dollar sponsorship world of online gaming and gambling in the US…a world which will grow exponentially in the coming years.
As part of the partnership, co-branded assets will be built for fans of the two teams. Through a new and exclusive promotion called the ‘Dream Seat Series’, fans located in New Jersey who play on nj.partypoker.com will be able to compete for a number of great prizes, including regular, courtside and VIP suite seats to all Devils and Sixers home games, road trips with the teams and coveted tickets to concerts all year round including the upcoming January 22 Jay Z concert at the Prudential Center. Included in the partnership is the integration of partypoker into the Devils and 76ers web sites and social media channels, and mobile applications; tickets and hospitality; in-arena signage, including dasher boards, on-ice and on-court; and rights to broadcast television and radio advertisements during Devils and Sixers games.
For the Devils and the Sixers, two teams that are challenged in the sponsorship space, it is a jackpot that the new ownership group in New Jersey may have seen but could never have anticipated happening so soon. For partypoker it establishes a price and a beachhead for which other sites will now bid against. Strategically the deal makes sense for many reasons other than just the sponsorship. The Sixers, no longer owned by publicly traded Comcast as the rival Flyers are, have probably less investor pushback than their hockey brethren in “The City of Brotherly Love.” They have attendance issues and lots of distressed seats to fill right now, and they have a D-league team across the river in Delaware who also needs help in a state where online gaming may also soon be legal. While some questioned the synergy that could exist between the devils and Sixers when Harris’ team made their purchase in 2013, this deal, and potentially others like it, show the value. They are able to blanket not Philly, but the corridor between Philly and New York through NBA and NHL partnerships with unique deals in two arenas and in a very large geographic area. That for sure appealed to their new sponsor and may set a precedent for other deals in new categories going forward for two franchises that need to carve new roads for dollars. While it is true that franchises with distressed inventory have created “unique” partnerships before…the Islanders signing a tattoos sponsor, and the Nets when in New Jersey creating any number of unique categories, including “official tax service” for a while, this virgin category has huge potential, huge dollars and huge ramifications for sponsorship going forward.
There is no doubt that New York’s prominent franchises in the winter, the Rangers and the Knicks, who already have solid sponsors in the casino space, will find a way to engage with one of the online sites. Their broadcast partners, also looking for new revenue streams, are almost certainly in the hunt for dollars that are now free, clear and very legal as well.
The question will be if the more conservative ranks of MLB, or the deeper and somewhat more selective teams of the NFL…the Jets, Giants, and Eagles…will also find a way to engage. For New Jersey’s minor league baseball teams, as well as for the Red Bulls…the deal and the opportunity will also set a precedent for them to negotiate and engage with. It is hard to believe that the MLS club, a sport with deep relationships abroad in not only gaming but with Betwin itself, won’t find a way to exploit the new coffers. The minor league teams affiliated with MLB clubs may be a bit hesitant because of their promotion of more “family friendly” environs, but the State’s independent teams in Somerset and Montclair should be on board with creative programs before first pitch this spring. Who knows maybe there will even be hope for the recently deceased Newark Bears? And how about Pocono Raceway, tucked in the mountains with several hundred thousand NASCAR and Indy car fans coming every year? The online dollars and fan engagement that is now OK can’t be too far away.
While Thursday’s announcement was all about poker in New Jersey and online non- financial prizes in Philly, this is just the beginning for a wave that will continue to challenge the Federal statue for all sports wagering, something which new jersey has led the fight for. Already a growing number of teams are allowing “pay fantasy” programs, and now the infiltration of the online poker category will put more behind the scenes pressure, and create more sponsorship opportunities for large dollars, for professional teams already challenged with finding new revenue to offset ticket prices. That is to say nothing of the chunk of mobile revenue that can be brought in through established online wagering, as is the case in many places where sports gambling is legal around the world.
What will the leagues say if there is opposition to gambling? As has been the case, there will never be a challenge publicly by any league or team. They will abide by the Federal law and what Congress determines as fair and legal. However when the law changes or evolves, they will follow suit.
Now as we have said before this is not Armageddon or the end of sports as we know it, where the fix is in for every game, and fans are scurrying to betting parlors to bet against their hometown heroes for the sake of a buck. What it is is the evolution of sport in a category that has multi-BILLION dollar potential, and already has a well-documented illegal marketplace going on. The legal side of sports betting is well established abroad and even in Nevada, and the Caribbean, where sports gambling goes on every day without incident. Will there be hiccups and issues and adjustments? Yes. However the tide for legal wagering and gaming in the United States is rising, and Thursday’s announcement by the leadership of the Devils and Flyers is the latest, and certainly not the last, move in that lucrative evolutionary process. It will be a slow and steady test to see what the American fan base will endure, just as it was with fantasy, with cable broadcasts, with the lottery, even in some sports already with jersey advertising. Test, record, respond and see what the market will bear.
So far, all tests for the Devils and Sixers are positive. Where will it go next? Sports gambling is still a ways away, but the other teams and their broadcast partners will clamor for their own share, and those creative promotions and big dollars will be next. All will be slick, fun, legal and highly effective for all involved.
So with the gambling vice in the mix, is there anything left for challenged sports brands to conquer, especially in and around The Garden State, the home of Big Pharma? How about condoms, an industry also with huge pockets and promotional expertise. Scott ONeil and company found a way with one gamble, maybe they can test another “first” for sport.
In either case, don’t bet against it.
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