Following the leader in U.S. sports betting
Although we are just a few steps into what promises to be a very long marathon for the development of sports wagering within the U.S., there has already been a clear leader out of the gate—MGM Resorts International.
Indeed, in the scant six months since the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), essentially clearing the way for state-by-state legalization of sports betting, MGM has inked partnerships and data share arrangements with most of the major U.S. professional sports leagues—the National Basketball Association (NBA), the National Hockey League (NHL) and, most recent, Major League Baseball (MLB).
MGM Chairman and CEO Jim Murren was a keynote speaker at last month’s ICE Sports Betting Conference USA in New York City, where he talked about the strategy behind MGM’s spate of deals with U.S. professional sports leagues. Here are some excerpts from his presentation:
On how the past few months have been for MGM and how they got off to such a fast start:
“We had been hoping for the PASPA ruling for a number of years now so we’re like a horse at the gate ready to burst out if the ruling came out positive, and it did. It has been hectic… we have started a company with our friends GVC, we have been working with teams, we have been working with leagues, we are establishing a headquarters for our sports betting enterprise and we have been working with our platforms to create a holistic experience. It has been a heck of a lot of fun.”
On the strategy behind the deals with the leagues:
“I believe we are taking a slightly different approach than most of the other operators within sports betting. We look at sports betting as portal to a total interactive experience—meaning that sports betting will be part of a portfolio of activities that our customers engage in, whether it is social gaming, poker, casino gaming, other forms of Internet gaming and, of course, sports.
“If you look at it from that perspective, then the universe is much broader than trying to analyze how big the sports betting market will be in the U.S. For us, as a bricks-and-mortar entertainment company, we feel the best approach forward for us and a differentiator for us is to link our land-based resorts to this interactive experience. Under that philosophy, having relationships with the leagues is critical; we want to have an aligned interest around the trust of the data and integrity. So whereas some of our competitors have focused on doing transactions with teams, we focused on the leagues… with the understanding that we do not know exactly how this is going to play out in the U.S. over the next five to 10 years, but we will try and figure this all out together.”
On utilizing league data and the integrity fee debate:
“We are paying for league data. We sat down with the various leagues for serval months… and evaluated what kind of partnership we could bring to the table that could be of benefit for both of us. Right up front we said we were not interested in paying an integrity fee, and that we are actually offended by that concept. It is disturbing to us because our whole business model is based on integrity… we don’t feel like we need to pay a fee for what we do every single day.
“But we are willing to pay—and pay well—for data, sponsorships and co-branding. So each of our three deals [with professional leagues] are slightly different, but all have these same concepts.”
MGM’s fast start into sports wagering has been impressive and, despite all appearances, measured. They are showing how this race can be run, and it will be interesting to see if the rest of the casino operator pack can catch up.