Why the NFL went all in on sports gambling

New York (CNN) — Twenty-one years ago, the National Football League would not allow Super Bowl ads from the Las Vegas Convention and Visitors Authority because it didn’t want even a whiff of gambling associated with the sport. On Sunday, the NFL will hold its first Super Bowl in Las Vegas, a city built on gambling.

Even in 2003, gambling was as much a part of the NFL as tailgating, helmets and shoulder pads. Fans have been making bets on football since it was a semi-pro sport a century ago, when it was garnering far less attention than horse racing or boxing.

And with the wagering on football came a boost in visibility and, indirectly, revenue.

Despite moving its big game to Vegas, and partnering up with the companies focused on sports gambling, the NFL is still trying to keep the appearance of some distance between the sport and gaming. Players can be fined or even suspended if they place a bet at one of the Nevada’s many casinos or if they bet on league games, which was the case in June 2023.

Yet the change in the league’s relationship with sports gambling couldn’t be more obvious as it prepares for its first Super Bowl in Sin City.

“Obviously there’s a lot of hypocrisy going on here, but attitudes have changed a ton,” said Victor Matheson, professor of economics at the College of the Holy Cross, who teaches a class in The Economics of Gambling.

Sports betting has been a part of Nevada for decades but had been illegal everywhere else a Supreme Court decision in 2018 gave every state the chance to legalize it.

“After the Supreme Court decision … there was a pretty quick change,” Matheson said. “The leagues went all in.”

‘The world changed’

The NFL can point to the 2018 court decision to explain its embrace of the sector it once publicly shunned.

The NFL changed its stance “because the world changed” with the Supreme Court ruling, said league spokesman Jeff Miller at a pre-Super Bowl media briefing.

Betting sites Caesars, FanDuel and DraftKings are official partners and have agreements with the league just like Bud Light and other sponsors in that they can use the NFL logo in advertisements. Caesars Entertainment is the official casino sponsor of the NFL.

Miller says the NFL doesn’t get a cut of the amount wagered with these companies. But the NFL and its television rights holders, which pay the NFL more than $13 billion a year to broadcast games, have seen a boon from advertising by the legal gaming industry.

Gambling companies spent an estimated $508 million last year on television ads, according to MediaRadar, which tracks and estimates ad spending. That amount is not that far behind the $685 million that beer companies spend on television ads.

Not all that money was spent on ads during football games, but the NFL has by far the largest television audience of any sport or entertainment programming, which means its broadcasters are pocketing a lions’ share of the ad dollars.

That direct spending is only part of the way the NFL has learned to profit from legalized gambling.

Wagering helps hang onto viewers

Fans with even a modest bet on a game are more likely to stay tuned when the score gets lopsided, given they could still end up as winners depending on the nature of their wager.

The American Gaming Association (AGA) estimates that 68 million Americans will bet $23 billion on the Super Bowl, or an average of $340 by each bettor. The amount wagered is up 44% from a just a year ago. The AGA says nearly 28 million American adults, or one out of every nine, intends to wager with the legal sports books.

The NFL and other leagues have discovered that the growing amount wagered on games is key to building viewership in an age of greater competition between networks and streaming services.

“The NFL knows getting people involved monetarily is key to getting them hooked on the games,” Matheson said.

“In the era of streaming, there’s tremendous fragmentation of the audience for their video amusement,” said Andrew Zimbalist, professor emeritus of economics at Smith College and a leading expert on the economics of sports. “You hold onto (the audience) by allowing them to gamble.”

Zimbalist said the NFL didn’t lead the change of thinking. Rather, he points to the New York Times op-ed by NBA Commissioner Adam Silver in 2014 calling for legalized gambling on sports as the sea change moment. The column came four years before the Supreme Court opened the door for legal sports gambling.

Not every state allows betting on sports. It’s still illegal in two of the largest – California and Texas. Efforts to legalize sports betting in Texas have failed twice recently. But it’s now legal in 38 states plus the District of Columbia. In most of those states, a bet can be placed from a smart phone.

Zimbalist said beyond the financial risks posed by those suffering from a gambling addiction, sports leagues face risks if fans see games as simply a way to wager, rather than something for which they can form an emotional bond.

“Sports has long been a way of bringing people together,” he said. Even fans of opposing teams can argue about sports without it becoming as contentious as other issues splitting society today, such as politics or the Middle East war, he said.

“That’s one of sports’ greatest values,” he said. “But I’m concerned that gambling is going to undo that.”

CNN’s Alicia Wallace contributed to this report.

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