On Wednesday, 9th February 2022, following an earnings call, Disney announced its expansion plans into sports betting (1). Disney CEO Bob Chapek (2) acknowledged that he is in talks to purchase NFL Sunday Ticket and that sports media would be a big part of the company’s future.
With Disney’s move into sports, the sports betting sector might experience a four-fold increase in popular adoption by 2025.
In 2021, sporting activities accounted for 95 of the top 100 most-watched live broadcasts.
According to Chapek, Disney will expand into betting, gaming, and Metaverse events. While TV broadcasts will remain the backbone of Disney’s sports offerings, the firm will extend into betting, gaming, and Metaverse events.
It follows the repeal of a federal ban on sports betting and a wave of state-level legalizations across the United States (3). Notably, sports betting is already legal in 31 states, with legislation being proposed in 11 more.
Dish Network and FuboTV have also entered the market. Dish teamed with DraftKings Sportsbook earlier this year to establish an app interface for its consumers. In Iowa, FuboTV debuted its own sportsbook, which it plans to spread to other states.
Meanwhile, Disney also intends to incorporate sports betting into its Metaverse operations to keep users actively involved, says Chapek. Because of the company’s family-friendly reputation, the industry is likely to gain more general appeal.
In Europe, where sports betting has been permitted for longer, it is already a significant industry. It is a 5.9 billion EUR sector in the United Kingdom, with a 7.5% increase in Europe last year (4).
Also, sports betting is anticipated to expand from 9 billion USD to 37 billion USD in the United States by 2025. In comparison, the space continues to be in a gray area in India (Suggested Reading: The Boom of Online Fantasy Sports in India).
Disney Placing Bets on Live Streaming, Metaverse, and Sports Betting
Last week, Disney CEO Bob Chapek confirmed that the business is bidding for the NFL Sunday Ticket, reiterating its commitment to extending its sports streaming portfolio. Disney also intends to innovate its product by including sports-related features and its still-undefined metaverse plans.
In an interview with CNBC (5), Chapek clarified the NFL Sunday Ticket announcement while discussing Disney’s first-quarter earnings for FY 2022. “We’re bidding for it,” Chapek said when asked by CNBC’s Julia Boorstin if securing the rights is part of Disney’s plan. “We’ll go ahead and execute it if the investment delivers value for Disney shareholders,” he continued, “but if it doesn’t, we’ll pull out. And we sincerely hope it is.”
Chapek also emphasized how important sports programming is to the company’s streaming plan, citing the success of its subsidiary ESPN’s programming.
“Sporting events will continue to be the most compelling draw on television in 2021, accounting for 95 of the top 100 most-watched live broadcasts. And ESPN raised the bar again this quarter with live games in each of our four major US sports, including the ground-breaking Monday Night with Peyton and Eli,” said Chapek.
Over the following three years, he said Disney would add alternative programming for UFC, golf, and college football games.
Disney’s sports strategy, though, isn’t only about acquiring rights and broadcasting games. Betting, according to Disney, provides a massive opportunity for growth and involvement, especially as legalization expands across the United States (6).
“While multi-platform television and streaming will continue to be the backbone of sports programming for the foreseeable future,” Chapek said, “we believe The Walt Disney Company’s opportunity goes well beyond these channels. It includes sports betting, video games, and the Metaverse.”
“That’s what excites us the most: the chance to create a sports machine equivalent to our franchise flywheel that allows fans to connect with, experience, and become actively engaged with their favorite sporting events, stories, teams, and players,” added Chapek.
Chapek also mentioned Disney’s metaverse plans, which he often talks about without revealing specific details on what it would entail.
“We realize that in the future, call it metaverse or the blending of physical and digital experiences, which I believe Disney should excel at, it will be less of a passive type experience where you just have playback, whether it’s a sporting event or an entertainment offering, and more of an interactive, lean-forward, actively engaged type experience.”
“Product innovation is a very top-of-mind thing for us,” Chapek noted.
Sports Betting: The Next Big Thing in Sports Streaming?
Notably, Disney is not alone. Over the past two years, we have seen more and more sports streaming players entering the sports betting space (7).
Sports fans have a plethora of streaming services to choose from than ever before. As these services seek new methods to attract viewers and keep them tuned in, several appear to be gravitating around a major new feature: sports betting.
Across the industry, streaming providers have begun to include betting elements next to their sports feeds, offering a way to increase engagement while also garnering new revenue. Disney, DAZN, FuboTV, Sling, and others have either launched or expressed interest in joining the betting companion space in the United States.
And, why wouldn’t they? Sports betting has been long associated with contests for as long as we can remember. Long story short, there is a lot of money to be made.
“For decades, sports fans have been making unofficial bets with their friends and family while watching the game. It’s kind of intrinsic to being a fan, placing casual bets with friends and family, and it’s something we thought would make our product even more engaging than it is today,” says Mike Berkley, chief product officer of FuboTV (8), which recently introduced its own betting app.
And now, with Disney – a streaming mastermind known for its family-friendly content, foraying into sports betting, we can take it as evidence that it could be the next battleground for any company in the live sports streaming service.
Sports Betting Breakneck Growth in the US
Sports betting has grown popular in recent years state-wise in the USA.
In May 2018, the apex court capsized a federal ban prohibiting sports betting, allowing individual states to do it independently (9). After that, sports betting was quickly allowed in New Jersey (10).
According to research firm Ampere Analysis, 34% of sports enthusiasts in the United States bet on games a week and spend an average of 51 USD a week. According to the firm’s data, sports fans also spend about 3.2 hours per week on fantasy games.
Overall, sports betting offers significant potential for live sports services to increase user engagement, differentiate their offerings, and grow their business.
Apart from Disney, Dish collaborated with DraftKings earlier in 2022 to integrate DraftKings’ fantasy contests and sportsbooks into its Hopper platform (12). A Dish-owned live TV service, Sling also supported an integrated DraftKings betting experience and dedicated betting information channels (13).
Meanwhile, FuboTV launched a proprietary sportsbook feature last for betting in Iowa. At present, it is clearing regulatory processes to operate in other states. Peakon and NBC Sports have partnered with PointsBet to integrate their sports betting business (14).
According to DAZN chairman Kevin Mayer (15), “the company plans to engage in the betting business directly where we can.”
“There are no specific plans for the company to share at this time regarding its US betting strategy. But it believes that adding recreational betting to the DAZN platform across all markets will offer a safe, immersive, and fun experience for fans to enjoy alongside the top-tier sports they love,” said Graham James, DAZN Spokesperson.
Read Also: Gaming: A $300 Billion Business Opportunity
The Mainstreaming of Sports Betting
“The fact that ESPN, DAZN, and everyone else is talking about sports betting in public makes me think they think it’s too huge an opportunity to pass up,” Ampere principal analyst Minal Modha told The Verge (16).
If we look at numbers, we don’t need to ask twice why the opportunity is massive.
According to Ark Invest (17), the US sports betting market alone will be worth 37 billion USD by 2025, up from 9.5 billion USD today.
Eleven states have already surpassed the 1 billion USD wagering thresholds (In just four months, Virginia has been the quickest so far to hit the milestone) (18).
According to the American Gaming Association, sports betting income in the United States hit 961.1 million USD in the initial three months of this year (19).
Sportsbooks are doing everything they can to cover the remainder of the country, as nearly half of all states in the USD have legalized betting in some form. For instance, both DraftKings and FanDuel have committed 20 million USD to help Florida legalize sports betting (20).
It is also worth highlighting that fans and bookmakers aren’t the only ones who profit.
- Nielsen stated that the internet gambling business, especially sports betting, spent 154 million USD on local TV commercials in Q1 of 2021 (21).
- By 2024, according to BIA Advisory Services, the local-spot TV market will have spent more than 587 million USD on online gaming.
- In 2020, 11.5 million USD was spent on out-of-home sports betting advertising (22).
- Technavio says the global sports betting market is also witnessing a similar growth (in-line with the US) and is likely to expand by 134 billion USD between 2020 and 2024.
Another major factor contributing to the mainstreaming of sports betting is the shift in consumer demographics and mindset.
Sports betting has been frowned upon traditionally. However, these companies have started introducing it today, considering the shift in consumer behavior.
For instance, Chapek himself stated that the decision could have been hazardous for an immaculate brand like Disney in the past. However, he claims that betting will now benefit the company’s sports division, particularly among younger generations.
“Gambling no longer has the cachet it had 10 or 20 years ago. When you have a betting component, it increases the ESPN brand, and it does not influence the Disney brand,” remarked Chapek last year.
As sports betting enters the mainstream market, more players will rise in this space. And when that happens, questions most of these companies, including Disney and the likes, would be;
- What would be an excellent way to leverage this massive opportunity?
- What would be our selling point (differentiation) to stay ahead of competitors?
After all, in this sea of services, all these players are offering more or less the same thing.
We believe that as sports betting becomes mainstream across streaming services, their success may depend on how they can stand out among the crowd (Suggested Reading: Purple Cow Theory: Businesses Find Success When Remarkable). It is especially true for smaller companies and startups competing against giants like Disney.
The key is to ensure customer engagement, constant product evolutions, and staying ahead of the curve!
What do you think? How will sports betting evolve as it enters the mainstream market? Should India also legalize it to tap into this massive opportunity? Let us know your thoughts!