The NBA, FanDuel, and the New Betting Economy of Sports Television

by

Curator's Note

The creation and widespread legalization of Daily Fantasy Sports (DFS) has irrevocably altered how people engage sports television. Considered by most states to be a game of skill, rather than gambling, services like FanDuel (created in 2009) and DraftKings (2012) prompt users to ‘draft’ specifically priced players of their choice under an imposed salary cap. But it is the partnership between FanDuel and the National Basketball Association (NBA) that has most profoundly pointed a path forward for the possibilities of an integrated media ecosystem, which encompasses betting, television, and the Internet.

The NBA, which has an equity arrangement with FanDuel, offered a free-to-enter “prop bet bingo” during the 2018 All-Star Game’s Saturday night skills challenges. Using the FanDuel website or mobile app, the first to call ‘bingo’ by pressing a designated button was awarded $1,000. Second through tenth place received $200, then $100 through twentieth place, down to $2 for those between 2001st and 4725th. The props, like an appearance by Drake or a LeBron James commercial, affected how fans engaged the festivities by making them wait for specific occurrences. Fantasy bingo, as well as DFS betting more generally, shifts the terms of Dallas Smythe’s “audience commodity” by financially compensating the audience for their sustained viewership and expertise.

The NBA’s ultimate goal is to boost viewership by raising the stakes for fans, encouraging people to watch games that they might not ordinarily watch. A late season game without any playoff implications suddenly matters to anyone wagering on DFS. Accordingly, all NBA contests on FanDuel feature a banner that encourages fans to follow along live by signing up for their streaming service, League Pass. More betting equals more viewers, which results in higher ad rates and higher revenues.

Others have seen the same benefits – Major League Baseball and the National Hockey League both partnered with DraftKings to offer their own branded betting opportunities. Few, however, have been as aggressive as the NBA, which extended its partnership with FanDuel for the launch of NBA InPlay, designed to offer in-game ‘live’ fantasy betting. With pending court cases (e.g. Chris Christie vs. NCAA) that could open up gambling opportunities to more than “games of skill,” the paradigm developed by DFS points towards a future of even deeper integration of television and betting, wherein fans can wager throughout the game on designated mobile apps. The NBA, especially, has pursued and prepared for this eventuality.

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Dana Gavin's picture
By Dana Gavin
Old Dominion University

This is really fascinating, and it's making me think more critically about the efforts in New York, championed by State Senator John J. Bonacic, to legalize and regulate sports betting (http://www.recordonline.com/news/20180308/bonacic-introduces-bill-to-reg...). Based on your research, do you feel this is positively or negatively impacting the fan experience? You write, " the paradigm developed by DFS points towards a future of even deeper integration of television and betting" -- do you think this benefits fans in the long run? Is it going to be harder for fans to play in fantasy leagues and avoid gambling?

Steven Secular's picture
By Steven Secular
University of California, Santa Barbara

Thanks for the reply! Yeah - New York has been one of the more aggressive states in figuring out how sports betting might work moving forward. Really eager to see how all of this turns out. As far as the fan experience, speaking for myself, it has definitely been more positive than negative – the games seem to matter more and I follow all the news, injury updates, and statistical trends much more closely than I would have. Which I suppose is true of fantasy sports in general. But the daily competitions, as opposed to season-long leagues, as well as the higher financial stakes and tangible payouts really elevate the level of involvement. Plus, the fact of participating in these tournaments with thousands of other people, keeping track of the news alongside them, soliciting advice from them – the communal aspects of fantasy sports feel intensified.

Michael Blight's picture
By Michael Blight
North Central College

I wonder if we can categorize or somehow separate the different types of viewership. I'd imagine there would be different tiers that roughly shake out to, (1) individuals hyperfocused on simply winning; (2) people who want to win first, but are rooting for their favorite team's success; (3) people who want "their team" to win first, but winning in fantasy is cool, too; (4) etc. Your sentiment of, "elevating the level of involvement" is likely interdependent with the monetary payouts. The euphoric experience of winning a bit pot certainly tugs at positive affect. On the other hand, losing on a big buy-in... yikes! It might be interesting to examine both ends of the continuum - winning and losing.

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