In testimony against New Jersey’s attempt to legalize gambling in 2012, the NFL and commissioner Roger Goodell drew a line between fantasy sports and gambling. The biggest issue according to the NFL was that legalized gambling could damage fans’ perception of the NFL, while fantasy football apparently does not have the same issue. However, perception is an NFL problem. The NFL doesn’t see a money-making opportunity because it would be reluctant to partner with a spread betting sports book. Since it can’t make money off spread betting, the NFL has no interest in backing its legalization.
An interesting part of the unsealed testimony is a direct quote from Lawrence Ferazani, senior labor litigation counsel for the NFL, in which he suggested that the NFL may be keen to legalized gambling if the NFL knew it would help its business. “The NFL is in a revenue-generating business,” he said. “If the NFL believes that sports gambling would allow it to increase its revenue, the NFL would engage in that activity.” That does explain why the NFL backs fantasy sports, because fantasy partners — daily and yearly — make a lot of money for the NFL and its constituents. Unless teams and leagues partnered with online sports books, the NFL wouldn’t see a dime.
Gambling on outcomes and score totals isn’t going to stop, and as of now the only way to do so is illegally. The NFL benefits from this type of gambling through a soft benefit. Gambling increases engagement. Television shows wouldn’t discuss point spreads if there wasn’t an appetite shown by the fans. However, the NFL does not benefit financially as it does with daily fantasy site sponsorship deals. As Ferazani said, the NFL is a business, and if it could make money off gambling it would (and the NFL could make money off sports book partnerships if it wanted). The problem is that fans may take issue with those partnerships. It is simply an issue of perception.
Contrast the NFL’s view with that of NBA commissioner Adam Silver, whose point still holds. By some estimates, there is over $400 billion worth of illegal traditional betting going on in the United States. That is a ton of cash flowing through organized crime and other illicit groups that take bets. By regulating gambling it would make it easier to tax, and safer for fans interested in putting down a wager on a game. The whole idea of this seedy perception is due to how people gamble now. It is a self-fulfilling prophecy.
The NFL is fine with daily fantasy sites, and said that if it thought it could make money on traditional betting, it would back that as well. The problem isn’t that the NFL can’t make money. It can make a ton of money. The problem is the NFL doesn’t think the public would like the idea of leagues and teams being partnered with an online sports book. Therefore, the NFL can’t make money off it, meaning that fans have to look to less reputable ways to gamble on games.
Michael Colangelo is Managing Editor of The Fields of Green and Assistant Director at the USC Sports Business Institute.