Verizon exploring possibilities of a wider U.S. sports betting market
News on 24 Jan 2018
News on 24 Jan 2018
Emulating a number of US states, the American communications giant Verizon is reportedly considering the opportunities in US sports betting if the US Supreme Court rules against the restrictive federal Professional and Amateur Sports Protection Act, enabling an expansion of the estimated $155 billion market beyond the current four states (see previous reports).
Sources have told media that New York-based Verizon has been meeting with experts and consultants to assess the potential for a sports-focused online gambling venture if the laws in the U.S. change. Verizon bought Yahoo and its popular sports fantasy business last year for $4.5 billion.
Responding to the publication mcall this week, Verizon Chief Financial Officer Matt Ellis said:
“There are some changes coming that we pay attention to. We stay close to that to see how it would affect our asset and how we may choose to respond.
“I’ve not looked at anything in detail. If someone has an idea around it, I’ll look at it like any other. But we are not getting ahead of ourselves there.”
An unidentified source told the publication that Verizon may ultimately decide to stay out of the intensively competitive sports betting market, but was thoroughly exploring all the options.
Gambling is a tempting potential growth market, and Verizon has the nation’s largest mobile network, with more than 100 million subscribers, along with Yahoo, which has 1.3 billion users.
Yahoo’s fantasy sports unit has tens of millions of fans who spend 30 billion minutes a year managing imaginary teams and picking players, often paying fees to participate in guaranteed prize pools, mcall reports.
Instead of trying to build a gambling business internally, Verizon could look at acquiring online sports-betting companies to speed up the process. That’s a strategy it has used in the past to get into a new line of business, such as its acquisition of Intel Corp.’s OnCue video service in 2014.
Mcall points out that Verizon also has streaming rights to some National Football League and National Basketball Association games, which opens the door to live betting alongside broadcasts, a popular offering in markets like the U.K.
Last week, when Verizon announced an expanded streaming deal with the NBA, Chief Executive Officer Lowell McAdam and NBA Commissioner Adam Silver discussed a $25 million joint investment to develop features like quarter-by-quarter fantasy betting, the publication notes.
Both Verizon and the NBA see such contests as a way to boost fans’ interest and engagement in live games.
Quoting a study by gaming consultants Eilers & Krejcik Gaming, mcall observes that a regulated U.S. gambling market would be worth as much as $15.8 billion in revenue, with 44 million customers wagering $245 billion annually.
Among the estimated black-market American punters, more than 90 percent place bets online, versus 33 percent in person.
Following the Yahoo deal, Verizon created a media division called Oath, which contains Yahoo Fantasy – for decades the most popular online service for season-long fantasy contests. In 2015, Yahoo began offering for-money daily fantasy contests. It is now a distant third in a daily fantasy sports sector dominated by DraftKings Inc. and FanDuel Inc.
Bloomberg reported last week that DraftKings and FanDuel are also likely to be considering the opportunities inherent in a positive Supreme Court sports betting ruling.
