Yahoo! Sports Inks ‘Exclusive’ Gaming Partnership with BetMGM
Verizon Media and MGM Resorts International have announced an ‘exclusive’ multiyear partnership between Yahoo! Sports (a content and DFS leader) and BetMGM (an interactive gambling application). Integration of the BetMGM gaming product (see: all wagers placed will occur on their platform) within the main Yahoo! Sports site/app will take place before the end of November. In addition to their digital endeavors, the two entities plan to “create collaborative content experiences (see: the ESPN studio at Caesars' LINQ Hotel & Casino) and live events (see: DraftKings’ sports betting national championship)" for the sports fan.
Howie Long-Short: The Yahoo! Sports-BetMGM partnership is the latest example of a media company aligning with a gaming operator since PASPA was struck down back in May '18 (see: ESPN and Caesars, Fox Bet and Flutter Entertainment) and it reasons to believe that additional announcements are forthcoming. One high-level gaming executive said that before it’s all said and done “every media company (see: CBS, NBC) will have a partner – possibly several, but at least one deep relationship [with a betting co.].” It makes too much sense for it not to happen. The deals enable the content providers to profit on sports betting, while helping the gaming companies grow market share.
From a strategic standpoint, there’s little reason why a media company would prefer one gaming operator to another. These are ultimately marketing deals and in most cases, it’s sensible to sign with the company offering the most lucrative package. Deals structured on a revenue share are the exception, as brand recognition matters.
To be clear, unlike the Fox Bet – Flutter Entertainment deal, Yahoo! Sports will not have a “consumer-facing” gaming presence. There was speculation the company might after having introduced a successful DFS product back in ’15. Instead, Geoff Reiss and Co. will drive traffic to the gaming operator in exchange for affiliate fees. Having NFL streaming rights won't hurt their cause.
The fact that “a lot of [sports betting] revenues (and thus affiliate fees) won’t be generated for a couple more years” (as it stands, NJ and NV are the only states where the BetMGM app is live) didn’t deter the two sides from coming to terms now. Our source speculates that’s because BetMGM is guaranteeing Yahoo! Sports at least $10 million annually in advertising spend and MGM - which has dialed in its focus on sports betting - is eager to gain exclusive access to the content company's 60 million active users (valuable with DraftKings and FanDuel “the overwhelming market share leaders” in the states with legalized mobile sports betting).
Fan Marino: Coincidentally, Yahoo! Sports announced their new gaming partnership on the same day that it was disclosed Pat Forde was leaving the company to join Sports Illustrated. While those two stories are not connected, one well-respected gaming industry insider told me that he found the timing odd. “If you are making a play for sports betting, [one would think] you would want to solidify your content operation; letting your top college football writer leave is [counterproductive].” It certainly won’t help to bring prospective bettors to their site.