The Supreme Court is set to rule on a case that could expand legal sports betting beyond Las Vegas — and generate new revenue streams for media companies in the process.

The media business could use a boost.

What about a dose of gambling?

That’s what some media companies are hoping for as the Supreme Court prepares to rule on a case that could legalize sports betting throughout the United States.

In theory, that could move a giant industry that generates billions of dollars under the table into the open — and along with it, an opportunity for everyone from VC-backed startups to giant TV programmers to find new revenue streams.

Quick background: Right now, legal sports bets are primarily confined to Las Vegas. But the court is currently deliberating on NCAA vs. Christie, a New Jersey case that could invalidate the Professional and Amateur Sports Protection Act, a 1992 law that bans sports betting in most states. There’s a school of thought that the court could strike down PASPA, leading to legal sports betting in New Jersey, or multiple states, or the entire U.S.

A ruling could come anytime between now and the end of June.

Media companies have heard versions of this before. But now several of them are optimistic that legalized gambling could be a thing, for real. And they are mulling ways to take advantage.

As Time Inc.’s Sports Illustrated talks to prospective buyers, for instance, it is telling them it could put betting advice and other info aimed at gamblers into a digital subscription package that could eventually generate a substantial minority of the title’s revenues.

Last fall, media investor The Chernin Group launched The Action Network, a subscription service aimed at sports bettors. Industry observers believe the startup has plans to capitalize on gambling’s expansion, though the company declined to comment for this story.

And it doesn’t take a lot of work to see the outlines of a legal gambling strategy in Turner’s plans to let NBA fans stream live, in-progress games for a reduced price.

In-game betting — where you wager on the game while it’s being played — dominates the legal market for soccer gambling in the U.K. So it’s easy to imagine a mobile prompt from Turner’s Bleacher Report that doesn’t just tell you that the Celtics-Sixers game has gotten interesting in the fourth quarter, but asks if you want to place a bet.

How other media companies can profit from a gambling expansion is an open question. The most obvious way would be to run ads from casinos and sports books. If you watched the NFL in 2015, you’ll recall being deluged by ads for daily fantasy sports from rivals Draft Kings and Fan Duel; now imagine even more ads promising easy ways to place bets flooding your TV.

Other low-stakes options: Creating more gambling-oriented media — most sports outlets already spend time discussing gambling lines, especially for NFL games — and monetizing it directly via subscriptions or indirectly via ads. Another one: Affiliate link advertising that gives media companies a reward for sending consumers to sports books.

Much more complicated: Actually running your own sports book and profiting directly from the wagers. It’s not unheard of: In the U.K., satellite TV giant Sky owned and operated its own betting operating for about 15 years; it still owned a minority stake in Sky Bet until this month, when it was sold for $4.7 billion

A middle ground some companies are contemplating: Providing the tech and marketing to help an existing, Las Vegas-based sports book reach an audience on their phones. Draft Kings and Fan Duel would be obvious candidates for this.

Another open question: Even if sports betting becomes legal, will Big Media companies be comfortable participating? Or, more specifically, just how close to this can they get? Recall that in 2015, Disney’s ESPN was set to invest directly in Draft Kings, but the deal fell apart at the last minute, and the suggestion was that Disney’s top executives weren’t comfortable aligning Disney’s brand with betting. Would that change now?

Recode – All Go to Source
Author:

Peter Kafka

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