Sports Illustrated Launches Sports Betting Product

Sports Illustrated launched its gambling product, SI Sportsbook, in Colo. ahead of the NFL season this morning, in partnership with 888, a U.K.-based online betting and gaming company with 27 years of operating experience. The publisher plans to launch SI Sportsbook in New Jersey, Iowa and Indiana in the next few months, before expanding to 13-15 legal jurisdictions in the next two to three years, said Daniel W. Dienst, the executive vice chairman of strategy, ventures and tactical operations for Authentic Brands Group (the company that owns the Sports Illustrated brand). “Sports Illustrated is the most trusted name in sports, and we think that will translate into being the most trusted name in sports wagering,” Dienst said. Ben Affleck, Melvin Gregg and Shaq Consider the Odds in Funny Online Sports Betting Ad The financial details The financial arrangement between Sports Illustrated and 888 has four components, though Dienst declined to provide specifics. The deal includes a licensing fee, paid by 888 for use of the Sports Illustrated branding; a marketing commitment from 888; a first-time depositor payment, which acts as a commission paid by 888 to Sports Illustrated for every new gambler it delivers; and an equity component that gives Sports Illustrated a 4.99% ownership stake in 888, with future opportunities to buy up to 15% more equity at certain valuation thresholds. With the help of 888, SI Sportsbook aims to carve out between 5%-7% of the total addressable market for online betting and gaming, Dienst said. Estimates of the size of that market vary, due to the uncertain future of the industry––currently, 32 states and the District of Columbia have legalized wagering on sports––but projections from BetMGM and DraftKings place it between $14-$22 billion. In 2021, sports-betting is on pace to generate $4 billion, according to The Wall Street Journal. What SI Sportsbook will look like On the Sports Illustrated website, journalists will interweave relevant gambling notes into their reporting. For instance, when discussing an upcoming game, an article will mention the betting odds of the game. When a user clicks one of those links, they will be transported to the SI Sportsbook website. Regardless of the reader’s location, they will be able to view the odds and available wagers. But geo-restrictions will only allow readers in Colo., at the moment, to actually place a bet. In legal states, users will also be able to make wagers from their phones within the Sports Illustrated app, which will give them the ability to gamble in real-time wherever they are. Sports media is jumping on the gambling bandwagon Sports Illustrated is the latest in a series of high-profile sports publishers to partner with gambling companies to take advantage of the newly legal enterprise. Last January, casino operating company Penn National paid $163 million for a 36% stake in Barstool Sports and exclusive access to its branding. In July, Gannett announced a five-year, $90 million partnership with the sports-betting company Tipico. In August, ESPN announced that it is seeking to license its brand to a major sports-betting company for $3 billion, The Wall Street Journal reported. Sports-betting companies have rushed to ink deals with publishers because such partnerships immediately solve a top-of-funnel dilemma, said Daniel Kustelski, the CEO and co-founder of Chalkline Sports, a customer-acquisition firm in the gambling space. The lifetime value of a sports bettor can range between $2,000-$2,500, said Kustelski, so casino operators and gambling companies are willing to pay a premium to acquire loyal customers. “Publishers have always been in the business of selling captive eyes and ears,” Kustelski said. “With gambling, they have found another way to do that, a potentially very lucrative way, because bettors are so valuable.” Sports-betting could become the expectation For publishers like Sports Illustrated, if lucrative contracts are the carrot prompting them to introduce gambling products, reader migration is the stick. As major sports publishers rush to offer their audiences a gambling option, the feature could quickly become table stakes, said Adam Deutsch, a managing director at Deloitte. Publishers want to provide readers the opportunity to make any ancillary purchases within their ecosystem. Since its acquisition by ABG in May 2019, Sports Illustrated has built some of these complementary revenue lines into its business, such as tickets and apparel. The extension into sports-betting follows a similar logic: If a user is on the site, publishers should cater to as many of their potential needs as possible. In doing so, they capture more revenue per user and increase the stickiness of their product. Still, despite these efforts to prime reader loyalty, smaller outfits can still be at a disadvantage compared to the behemoths in the field, Deutsch said. Sports-betting companies with deeper pockets can offer users juicier incentives to encourage repeat gambling. Thanks to their larger infrastructure, they can also invent, build and deploy new forms of gambling more quickly. Finally, sports-betting companies’ partnerships with media organizations mean access to rights, video footage, branding, data and the most highly sought-after sports publishers will likely go to the highest bidders. “The big players that have significant marketing budgets, top-flight technical teams and really recognizable brands are still the most likely to ultimately win,” Deutsch said. “Remember, there's nothing stopping a sports bettor from downloading and creating accounts with multiple apps.” This Sports Illustrated Ticketing Site Promises to Minimize a Big Pain Point: Fees

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Sports Illustrated Launches Sports Betting Product in Colorado

The 67-year-old publisher is the latest to board the gambling bandwagon

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