Even In A Pandemic, Eyes Shift Again To Make Sports Business A Safe Bet

There is one thing we van say about sports with reasonable certainty; the experience we collectively had for all of our lives changed, at least for the foreseeable future, the week of March 12.

While we are seeing the resurrection of the business of sports start to come about…from PBR and UFC, to golf and NASCAR and what we hope is the return of team sports starting with international soccer, and even some other more niche sports like the PLL…what that will look, feel and even sound like is very much up for debate for brands, fans and media companies.

However one area–one that has been hit very hard just as it was strongly entering even more of the mainstream was the sports gambling world. Without games, casinos, online programs and even value derived from sponsorships–vanished overnight. And what little gambling on sport could be done online–obscure soccer matches, online poker events, esports and hype around things like the NFL Draft–was not what anyone envisioned. It was not anywhere near the bet investors, entrepreneurs and even consumer brands thought about making.

Now as the chips continue to fall, it appears that the gambling industry is retrenching and even finding ways to lead out as sports starts to reset and restart. We have seen MGM lead the way in trying to create safe zones for team sports to return to a large part of Las Vegas; casino businesses are working to regain consumer confidence both for brick and mortar establishments and for improved user experience online, and a host of startups looking to grow their user base have looked to refine their offering or in some cases, merge with others to have a best chance at not just survival but growth as things return.

There is also some cause for optimism in the space in the form of not one but two public deals that were completed while much of the VC world has come to a halt. The first was Draft Kings, which two weeks ago completed its $3.3 billion reverse merger with blank-check company Diamond Eagle Acquisition Corp. The second was disruptive data and mobile gaming company QL Gaming Group announcing a small but important raise of over $1.2 million on Wednesday (May 6). While at opposite ends of the financial spectrum in terms of dollars, they both show that sports gamboling as a business is still here, alive and will be part of the new world order as things return.

Some industry experts who remain bullish on the sports wagering space see those deals as a light getting brighter at the end of this dark tunnel.

“I believe that sports betting could quickly regain momentum after sports resume because there is pent up consumer demand, and the betting operators will need to acquire new customers, including more casual, first-time bettors,” said Chris Russo, CEO, Fifth Generation Sports, an advisory firm focused on the intersection of sports, technology and digital media. “During a downturn, buyers and investors tend to focus on existing portfolio companies, so the ability to complete a new transaction during an economic crisis is a big accomplishment.”

What that also signals for the sports business industry is that some of the largest advertisers in the space in recent years…from DraftKings and Fan Duel to MGM, William Hill, Caesar’s and others, will be looking to games, and the eyeballs attached to them, as a primary, and vital lifeline to help regenerate billions lost during this stretch. Not having fans in the stands will be a challenge, but having games for even casual bettors to spend against in states where sports gambling, and pay fantasy, are legal, is hugely important for all aspects of business, marketing and advertisers.

QL Gaming Group’s ParkQL Gaming

Draft Kings and Fan Duel, as two continued leaders in the fantasy and gambling space, will be investing heavily and smartly in engagement, and smaller well capitalized platforms that can help deliver quality data and a pristine user experience, like QL Gaming, will benefit.

“Our new and long term investors are very bullish on the casual gaming and sports betting market, and we are now poised to emerge stronger,” added Justin Park, CEO, QL Gaming.

How will mobile betting play into our return to sports?

“Right now, sports are not playing so that hits to the heart of companies offering information and services for bettors and fantasy players.  However, cataclysmic events tend to accelerate trends already in motion,” said John Kosner, CEO, Kosner Media, and a longtime sports business industry leader (who is also an advisor to numerous companies in the space, including QL Gaming). “In the case of QL Gaming, they are developing a product with a superior user experience on mobile devices and one designed for younger audiences.  The growth that will come in betting once sports begins in earnest will be driven by new users on their phones. We expect to see live sports back over the next few months. While we will not be able to attend these events live anytime soon, we will be able to watch them on TV, follow them on our phones and many will wager on them and re-engage in fantasy sports. QL Gaming was growing quickly pre-COVID-19.  We expect to see them pick up where they left off.”

Picking up the pieces where we left off on March 12 is what is eagerly anticipated not just by sports and gaming, but my most of the world that is in ways big and small connected to the sports, entertainment and media business. While we do know that the world will be different, seeing signs of encouragement on businesses both ancillary and vital to the industry is important. After all, if investors are willing to gamble, literally, on properties in the gaming space at this darkest of time, won’t they also look to the space when the lights come back on?

It’s a bet we should all consider, and be hoping that the table is crowded, even from a socially acceptable distance.