Legal sports betting may have created a sponsorship bonanza in the US but, as David Adams, Senior Director of Digital Partnerships at the Kansas City Royals explained to Insider Sport for the SBC Leaders magazine this year, not every team has enjoyed huge benefits.
The US is in a league of its own when it comes to commercialising sports and taking advantage of every revenue channel possible to maximise a team’s or league’s value.
Increasingly lucrative media rights, heightened sponsorship interest, merchandise sales and a range of other revenue streams, combined with collective bargaining agreements among sports teams, has made the US a sporting commercial powerhouse.
If all that was not enough, the post-PASPA influx of betting operators, both home-grown and international, has added a raft of new sponsorship opportunities.
The market’s two biggest players, FanDuel and DraftKings, have partnered a myriad of sports leagues and teams, while the likes of BetMGM, Bally’s and more have also utilised the seamless relationship between sports and betting.
The NFL remains undisputedly the biggest sport in the US and has snaffled plenty of money from sportsbook operators. According to Sponsor United, NFL sports betting revenue increased by 40% for the 2022 season, having quadrupled over the course of the last four years.
The NBA has also seamlessly integrated sports betting into its brand. Sponsor United detailed that the sports betting/gambling/lottery sponsorship category generated $71m in revenue for the league during the 2022-23 season, having the second-highest growth rate (21%) of all categories.
However, not all of the major US sports leagues have opened their arms to the world of sports betting. The MLB has been more hesitant to fully immerse itself in the landscape of gambling, as evidenced by its Authorised Gaming Operator (AGO) program.
One crucial element of the program is the ability for operators to access official MLB betting data. However, as only a limited number of sportsbooks are given clearance to become an AGO, putting lesser known betting companies – and MLB teams for that matter – at a disadvantage.
David Adams, Senior Director of Digital Partnerships at the Kansas City Royals told SBC’s Behind The Badge podcast about the difficulty caused by not being able to land potentially revenue boosting partnership deals with unapproved operators.
He said: “Every major player, when you think of the big four, has an approved gaming operator within the MLB. For some mid-tier operators that aren’t, that presents some challenges for us because we see the value in certain brands that MLB says we cannot partner with because they are not approved.
“It is definitely challenging. We have a couple of local casinos that aren’t approved operators that we’ve held talks with, they’re interested and then we go through the process with the MLB and then we have to put a pause on those partnerships.
“I respect and appreciate the program with the MLB, making sure they are protecting their data, and protecting their teams making deals with brands who are legitimate. I assume it is not a cheap endeavour for these brands with the MLB, so there are probably some hesitations there. It has become in some ways a net negative.”
You could say the Royals are stuck between a rock and a hard place when it comes to securing sport betting sponsorships. While the team acknowledges its links to its neighbouring state of Kansas – a regulated sports betting market – the team is actually based in Missouri.
This brings even more challenges for the ballclub as Missouri is still yet to regulate sports betting within the state. Despite a petition by Winning for MIssouri Education reaching over 100,000 signatures to push for legislation last February, it remains unclear on the timeline for any potential sign-off.
While a regulated sports betting scene would be more ideal for the Royals, this has not deterred it from speaking with operators in Kansas and making the most out of a unique position.
Adams said: “When you look at the Kansas City Designated Market Area (DMM) we are split almost exactly 50/50 between Kansas and the state of Missouri. Coming up on almost a year now since Kansas approved sports betting, we’ve been able to talk to some brands and bring in partners here with the Royals.
“The challenge is that we play in Missouri. That brings challenges from the perspective of promoting sports betting, such as promoting ‘bring your phone to the ballpark to bet on xyz’. We don’t have the ability to do this.”
But in the face of adversity, inside the sports betting walls of Missouri, the Royals have been able to strike a partnership with daily fantasy sports platform Underdog Sports, a testament to the MLB team’s belief in the burgeoning US sports betting industry.
“Underdog Sports is a great example of a club and sports betting brand finding that natural connection from day one. It was very clear both of our organisations are trying to push the boundaries of being more innovative and to think differently about our brands,” revealed Adams.
“We told this story of the name of Underdog and where did that name come from and then looking at us, as a small market baseball team who are not spending $3-4bn unlike some of the major market teams are. So we thought, we’re both underdogs, we’re both in this together and here to tell our story to promote our brands in similar fashion.
“We’re really focusing right now on the fantasy side of things, and promoting it within their platform with the hopes of eventually, if and when Missouri finally gets their act together, being able to promote and build out the sports betting side.”
The Royals partnership with Underdog underscores that not every sponsorship agreement has to be the most profitable or high-profile commercial deal. Instead it shows that there is still value for smaller entities to work together to create a cohesive and aligned vision that is both sustainable and profitable.
It remains unclear if or when Missouri will regulate sports betting, but what the Royals have demonstrated is that despite sponsorship boundaries in the way, there are still US sports teams that are finding innovative ways around them, no matter the size or scale.
