Legalized Sports Betting Providing Financial Boost to Sports Radio, Ad Revenue Expected to Increase
Posted on: May 1, 2019, 11:00h.
Last updated on: May 1, 2019, 11:00h.
With legalized sports betting expanding across the US, one of the largest radio companies in the country says the expanding gambling activity is providing an economic boost to its industry.
Last May, the US Supreme Court ruled the Professional and Amateur Sports Protection Act (PASPA) – a federal law that banned full-scale sports betting everywhere but Nevada since 1992 – was unconstitutional. With no congressional prohibition on the books, states now hold the right to determine their own sports gambling laws.
Entercom Communications Group, the nation’s second largest owner of radio stations behind only iHeartMedia, says sports betting is helping increase revenues. The publicly traded company based outside Philadelphia reported a three percent revenue gain in the first quarter of 2019.
Entercom’s network includes 235 news, sports, and music stations across the country. Nearly 50 are focused on sports programming. One of its most notable holdings is WFAN The Fan in New York, which broadcasts Yankees, Giants, and Brooklyn Nets games.
Traded on the New York Stock Exchange, Entercom shares climbed 2.23 percent to $6.89 on the earnings report.
Commissioned by the American Gaming Association (AGA) and conducted by Nielsen Sports, a study last year found that legalized sports betting will increase fan engagement and expand interest in pro and collegiate events. Nielsen also found that adults who bet on the NFL watch 19 more regular season games than those who do not.
As a result, advertisers engaged in relevant businesses are expected to spend heavily to gain market share.
Entercom CEO David Field told investors during the company’s Q1 call, “A recent Goldman Sachs study concluded that total sports betting will grow to $15 billion in 2022 and over $30 billion in the long run. It is likely we will see a $2 billion ad market emerge.”
“If you think about radio getting a chunk of that … and Entercom’s prowess in the sports market, we think this could become a $1 million or $2 million dollar category for Entercom. That is certainly a reasonable aspirational goal,” Field stated.
Along with Nevada, today sports betting is operational in Delaware, New Jersey, Rhode Island, Pennsylvania, West Virginia, New Mexico, and Mississippi. Regulatory laws have also been passed in New York, Iowa, Indiana, Tennessee, and Montana, and a host of other states are considering legislation.
Tennessee Governor Bill Lee (D) is allowing a sports betting bill to pass without his signature that will allow online operators to take wagers inside the state’s borders. However, land-based sportsbooks will remain prohibited.
“The governor has said he does not believe that the expansion of gambling is best, but he recognizes that many in the legislature found this to be an issue they want to explore further,” the governor’s press secretary Laine Arnold told reporters.
Once the Tennessee sports betting bill becomes law, operations can begin as early as July 1.
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