Bet On eSport Gambling As A New Revenue Stream

April 30th, 2018 | by Jonathan Yates
Bet On eSport Gambling As A New Revenue Stream
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Esports

As a general observation based on lots of direct experience, many athletic directors at major universities have a football or basketball background as a college player.

Some such as Barry Alverez (football at Nebraska, now AD at Wisconsin), Dr. Carla Williams (hoops at Georgia, now AD at Virginia), Scott Barnes (basketball at Fresno State, now AD at Oregon State), Lynn Swann (football and AD at USC), and Todd Stansbury (football and AD at Georgia Tech) played big-time college sports. But college football attendance is falling. It’s the same for NCAA hoops, too.

What is booming everywhere, however, is eSports, which features video gaming teams in leagues such as League of Legends, Overwatch, Counter-Strike: Global Offensive and Dota 2.

As revenues fall in college basketball and football, those for eSports are approaching $1 billion, up 38 percent since 2017, according to Newzoo, a research firm. The YoutTube stars who make the most are those in eSports. Minecraft player Dan Middleton, a YouTube sensation with 11 billion views, made $16.5 million last year and sold out the Sydney Opera House four times on his world tour. By comparison, Stanford beat Rice in the Sydney Bowl last year before announced attendance of 33,101.

Another sure sign that eSports is a growth industry is the boom in betting.

Betting on eSports could be the next growth area in revenue for college sports. There is still a great deal of room for expansion here, which could solve many financial problems for many schools. This year, eSport betting is expected to be $6.7 billion, based on the findings from Narus, a software analytics company, Eilers & Krejcik Gaming, a research firm.

That same report expected the total to approach $13 billion by 2020.

By comparison, a 2013 report by the BBC estimated global soccer betting at between $49 billion and $70 billion. Like esports, this includes betting that is legal and illegal. If the Supreme Court allows expanded betting across the United States, count on betting on college esports to explode!

This creates an interesting cultural paradigm for athletic directors as of the top 60 schools for esports, only five are FBS: Boise State University, Georgia State University, Miami (Ohio) University, University of Akron, and the University of Utah.

Athletic departments at the major universities have the depth and the experience to handle pretty much any developments in gambling. Athletic directors at all schools are dedicated professionals with staffs devoted to what is best for the programs and especially for student-athletes. If the Supreme Court rules in a decision that allows for gambling on college sports in states that approve it, the bulk of wagering, at first, will be on basketball and football. Over the long term, though, it will not move the needle that much for betting on these sports as gambling is a mature industry with many establishments closing!

But gambling and eSports could be a rewarding combination for all schools with sports programs.

No matter what your position on expanding gambling on college sports, many see it as coming. Most likely, that wagered on basketball and football if the Supreme Court rules to allow it in more states will not grow from the existing amount. This is simply the nature of sports as it is a mature market. In the class I taught at the University of Iowa, “The Politics of Sports,” legalized gambling was the semester-long simulation exercise. A major facet of this was that revenues in sports never come close to the projections, so don’t expect it to be from gambling, either.

Fantasy sports is a perfect example why in this area.

A Wall Street Journal article from detailed that fantasy sports revenues were projected to be around $18 billion in 2021. In “reality” (how ironic), revenues for fantasy sports will come in at about $5.3 billion in 2021. This is the same for many other segments of the sports market, too. The wearables market, much of which is for sports, was projected to grow by 60 percent, but only did by 25 percent. There is no shortage of stadiums being built that never bring in the crowds expected!

Pretty much all of college sports is a seasoned sector in the market except for esports gambling!

Those that have embraced esports could profit handsomely. For those that have not, it could prove to be a lucrative new revenue stream that does not require building big, expensive new facilities. To paraphrase Yoda from The Empire Strikes Back,” when lecturing Luke about embracing “The Force” a flood of eSport gambling dollars for athletic directors is now, “For my ally is esports, and a powerful ally it is!”

Jonathan Yates About Jonathan Yates
Jonathan Yates spent much of his career working for Members of Congress in a variety of press and legislative posts. Positions he has held working for Members of Congress and state legislators include Chief of Staff, General Counsel, Legislative Director, Press Secretary, and Legislative Assistant. His journalistic work has appeared in such periodicals as The Washington Post, Foreign Policy, Investor's Business Daily, and TheStreet, among others. He has degrees from Harvard, Johns Hopkins, and Georgetown University Law Center; and has also matriculated at the U.S. Naval War College and The Johns Hopkins University School of Advanced International Studies (SAIS). Jonathan also hosts The Culture of Sports You can follow Jonathan Yates on Twitter at @politicsports13

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