Las Vegas Sports Betting Giants Roll the Dice on Hollywood Talent – Hollywood Reporter

Hollywood has come to accept that content is the primary weapon in the streaming wars. Quietly, as legalized online sports betting spreads across the country, content also has become the weapon of choice for digital casino operators and betting firms looking for that edge in what has been an expensive grab for consumer dollars. And content creators, from production companies to podcasters to established TV talent, are cashing in.It is the streaming wars version for casino operators, former Wall Street analyst Hal Vogel says.

Online sports betting has been on a steady expansion across the U.S. since the 2018 Supreme Court ruling in Murphy vs. NCAA paved the way for states to permit the practice. As each state legalized access to sports betting (its legal in 21 states, with another nine pending and others expected to follow), gaming operators jumped into the space, both digitally native firms like DraftKings, and legacy casino brands like MGM and Caesars. Even media companies entered the fray, with Fox launching FoxBet in partnership with Flutter (now owner of FanDuel).

But the expansion has proved to be expensive, with each state launch requiring a local marketing blitz. As anyone who lives in a state that has legalized sports betting in the past year or two would tell you, as soon as it becomes legal, TV ads, targeted digital marketing campaigns and mailed flyers proliferate. So gaming companies have turned to content as a point of differentiation. The result has been a flurry of deals covering podcasts, social media content like TikTok videos and Instagram pages, and even talent deals, as athletes, entertainers and sports media celebrities sign on with various gaming firms to produce originalcontent.

Most recently, Caesars Entertainment, owner of the famed Las Vegas casino resort and the Caesars Sportsbook mobile app, inked a deal with Peyton Mannings Omaha Productions to produce video and podcast content for its various platforms. Caesars big bet is that Peyton drives his rabid audience to its gambling platform and keeps them there, and away from others, says Peter Csathy, chairman of advisory firm Creative Media. Its all about customer acquisition and customer retention in an increasingly hyper-competitive online and offline world of gambling, gaming and crypto.

We do believe that consumers are smart, and it is much better to engage them with content and to let them get to know the world we are creating, Caesars Sportsbook chief marketing officer Sharon Otterman says. You dont have to keep hammering them over the head with this offer or that offer. It is a strategic way to build a relationship with customers, and to respect both sides of the equation.

It is, in the words of a finance world source, a wash, rinse, repeat cycle. Players come into the ecosystem because of the content, play, and then, hopefully, stay.

If anything, Caesars deal with Manning and his production company is the culmination of a years-long effort by betting firms to differentiate themselves through content. Penn National Gaming acquired a sizable minority stake in Barstool Sports in early 2020, and plans to become majority owner of the company next year. In addition to Barstool content like original podcasts, Penn also launched a Barstool-branded sportsbook.

Pat McAfee, the popular radio host and YouTube creator, inked a nine-figure deal with FanDuel last year to bring his program to the betting companys platforms. BetMGM struck deals with The Athletic, now owned by The New York Times, and Yahoo Sports, and Caesars hired former ESPN anchor Kenny Mayne in a content role, to name just a few deals.

Otterman says the company moved into content after it found that customers were tiring of the transactional experience of betting apps, with users saying the space felt more like a bank than the experience when you first walked into Caesars Palace.

Users enjoy and relate to talent and content on a different level than they do a game or betting app, and betting firms are more than willing to pay to secure that relationship for themselves. So far, many of the deals involve podcasts, and in particular podcasts that touch on sports, where the betting company is the presenting sponsor (and can also sell ad space). With sports podcasts already a top genre and betting already a frequent topic of conversation, the deals have proliferated. But deals for video content (again, usually sports-related), distributed on social platforms, YouTube, or within the apps and websites of betting firms, also have become morefrequent.

Former ESPN talent have been in particularly high demand. In 2021, DraftKings inked a multiyear deal with Meadowlark Media (co-founded by former ESPN chief John Skipper) to sponsor and distribute former ESPN radio host Dan Le Batards podcasts in whats been described as a mid-eight-figure deal. It is not a big leap for these companies to invest in media, because it gives them alternate ways to diversify their revenue streams, but also build their own audience and content, says Meadowlark Media COO Bimal Kapadia.

But more than anything, its about getting those consumers into their own ecosystems. It really is all about collecting those email addresses, says Joe Favorito, a sports media consultant and adjunct professor at Columbia University. Increasingly, content is becoming the most cost-effective way to achieve that result. As a high-level source on the content side of the business tells The Hollywood Reporter, online sports betting has reached a point where the street wants to see ways that are less cash-intensive to raise awareness and increase engagement for their platforms.

With much of the country on board or likely to launch legalized online sports betting in the next year or so, the localized land grab is giving way to more efficient national campaigns. The rapid growth of our footprint has opened up scale efficiencies that make some national initiatives accessible and attractive, whereaspreviously they were uneconomic because there was leakage into states where we were not active, BetMGM CEO Adam Greenblatt said at the companys May12 investor day.

That efficiency becomes more necessary as the country stares down a possible recession. Consumers are tightening purse strings, and sports bets could be an easy expense to cut. That environment could make content investments even more important, thanks to their inherent stickiness. Even if people dont make bets, they are likely to keep listening to podcasts or watching funny videos created by Manning or Mayne (like Maynes Betting 101 series for Caesars, which uses his quirky sense of humor to introduce betting concepts to users).

Dans voice, whether it is in a bear market or a bull market, is still relevant to his fanbase, Kapadia says of Le Batards loyal audience.

And the economics of the deals also work to help betting firms amortize their costs by selling other ads on owned podcasts or videos, or reselling content elsewhere if so desired. If betting companies can have their own content, or licensed or partnered content, they have an ability to lower those [consumer acquisition] costs because they can then recoup it through their own ad sales, their own licensing deals, their own partnerships, Kapadia adds.

Another content-side source notes that the strategy has already proven itself in between major sporting events, when, as one would expect, sports betting slows down. But consumers keep engaging with the content and return when things pick up. While a recession is certainly a different beast, the strategy shares a North Star.

We have no ambition to be a media company, that is not what we do, Caesars Otterman says, adding that increasingly the worlds of advertising and content are converging, and the best way that you can make sure a potential customer knows what we stand for, and to have an emotional connection to us, is to be immersed in our content.

And just as companies like Netflix, Disney, Paramount and NBCUniversal have found themselves in bidding wars for top-tier comedy and drama talent, betting firms are finding that authentic content from established names could be their ticket to consumer cash. Or at least their email addresses.

Gambling, gaming and crypto share the same opportunity and same dilemma, says Csathy. Consumers are willing to spend massive amounts of dollars, but they first need to know where to go spend that money.

Georg Szalai contributed to thisreport.

A version of this story appeared in the June 22 issue of The Hollywood Reportermagazine.Click here to subscribe.

Read more from the original source:

Las Vegas Sports Betting Giants Roll the Dice on Hollywood Talent - Hollywood Reporter