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Marcus Johnson (00:00):

Verve's global omnichannel advertising platform redefines what's possible beyond walled gardens. Verve illuminates, connects, and activates high fidelity signals that drive outcomes for brands, agencies, and publishers at scale. Learn more at Verve.com, V-E-R-V-E.com.

(00:36):

Welcome everyone to In The Game, an EMARKETER sports marketing podcast made possible by Verve. This is a conversation about how betting is taking over the US, American's real feelings towards how betting impacts sports and society, and if there's a way for brands to get involved in the gambling world responsibly.

(00:52):

Hello folks, I'm Marcus. And today I'm alongside two people we have with us. Living in Utah, senior forecasting analyst, Zach Goldner.

Zach Goldner (01:00):

Hey, Marcus. Pleasure to be here.

Marcus Johnson (01:02):

Hello there. Happy to have you. We're also joined by a principal forecasting writer living in New York City, Ethan Cramer-Flood.

Ethan Cramer-Flood (01:10):

Marcus, I bet this is going to be an excellent podcast.

Marcus Johnson (01:14):

Oh God, we didn't need that.

Ethan Cramer-Flood (01:17):

Yes, you did.

Marcus Johnson (01:19):

Take that out, guys. Anyway, today we're talking about sports and every other kind of betting. So sports betting, maybe you've done it. You've almost definitely heard of it. It seems to have come out of absolutely nowhere. So we're going to talk a bit about that. We'll talk a bit about other kinds of betting. You can bet on all kinds of stuff these days.

(01:38):

We'll talk a bit about how people feel about it and then what marketers and advertisers are doing about this relatively new universe. We'll start with this question though, and, Ethan, I'll throw it to you first. We've seen this absolute tsunami of money and interest in sports betting in the States in the last handful of years. What to you, what stat best explains how sports betting has taken over America?

Ethan Cramer-Flood (02:04):

Oh, yeah. I mean, there is no doubt that this is an absolutely massive monumental new trend. I mean, to the point that we now cover it here at EMARKETER because it has become a significant part of the digital economy. And so we try to track and forecast all of these elements even when they may seem a little bit tangential.

(02:22):

So I have two numbers for you because I'm an overachiever. Both of them, I think, collectively frame and contextualize the scale of what we're talking about here as this gambling becomes increasingly legalized all over the country. So the numbers are 200 billion and 50 million.

(02:40):

The 200 billion with a B is the total sports betting handle according to our forecast for this year. That is the amount of money that will slosh around, the amount of money that is gambled, which is not to say that's not profit or revenue necessarily. That's the money that gets bet and then it gets paid out and it gets bed, it gets paid out. Back, forth, back, forth. Less than 10% of that turns into revenue. But 200 billion dollars will be bet on sports.

Marcus Johnson (03:08):

On that number, for context, that was almost non-existent before the pandemic. It's not like all that market has been, the year before it was 190 and the year before it was 180. No, it was basically almost non-existent to about 10 billion-ish. So 20 times smaller before the pandemic.

Ethan Cramer-Flood (03:25):

Right, because back before... And it wasn't necessarily the pandemic that triggered this.

Marcus Johnson (03:29):

No.

Ethan Cramer-Flood (03:29):

But the proliferation of state legalization started 2018, 2019, something to that effect.

Marcus Johnson (03:34):

Yep.

Ethan Cramer-Flood (03:34):

And then some of the bigger states started to come in. Before that, you would've had to physically go to a casino or find a sportsbook or do it illegally. So the numbers would've been massively, massively smaller because it just was a challenge to participate in this.

(03:48):

Obviously, lots of people wanted to participate in this all the time because as soon as it started to become legal, you had this explosion. And to that point, I'll segue to my other number, the 50 million, which is the amount of people that are doing this. A little over 50 million betters, sports betters. This year, according to our forecast, that's something close to 20% of the adult population.

(04:10):

So this is not niche by any means. 20% of adults, 200 billion total. And the vast, vast majority of that, by the way, is digital, is via these apps. Only a very, very small percent now is actually in casinos physically, although we do count that as well.

Marcus Johnson (04:27):

Contributed to the explosion, hasn't it? I mean, it was the 2018-

Ethan Cramer-Flood (04:31):

It's the whole explosion. Yeah.

Marcus Johnson (04:32):

Basically, yeah.

Ethan Cramer-Flood (04:32):

The apps, the apps.

Marcus Johnson (04:35):

Yeah. 2018 ruling, Supreme Court said now you can bet on sports in multiple states. It used to just be in one, in Nevada in 2018, and now it's in 40 of the 50 states. So just an absolute explosion of growth there.

(04:49):

And there was, Ethan mentioned 50 million people, 50 million American adults. So one in five American adults are online sports betters. A piece in The Atlantic by McKay Coppins notes, "Roughly half of men ages 18 to 49 have an active account with an online sportsbook." And then according to Pew Research, "A substantial share of men under 30." So the young people, 36% say they have personally placed a bet, sports bet in the past year. Our 50 million, Ethan, is that monthly or per year?

Ethan Cramer-Flood (05:21):

Zach, you're our forecaster, jump in. That's probably monthly, right?

Zach Goldner (05:25):

Yeah, it is a monthly number.

Marcus Johnson (05:26):

Okay. Wow. Okay. Zach, how about for you? What numbers jump out?

Zach Goldner (05:30):

Marcus, I've got the same trend that you're looking at here. The key stat I look at is that 70% of sports betters in the US are male. And of that, it's typically under the age of 30. It's the most valuable media demographic too, which I think is a really interesting case for marketers. But young men have been one of the hardest audiences for them to reach and also one of the most valuable for them too.

Marcus Johnson (05:55):

Interesting.

Zach Goldner (05:56):

So we're seeing an influx of young men gamble on whatever they can. It started off as daily fantasy sports. It could have been fantasy football or March Madness and doing that once a year. And now it's shifted moreover towards gambling in whatever game, doesn't have to be competitive throughout the whole year and makes every game, every player of interest to those who are partaking.

Marcus Johnson (06:22):

I mean, let's talk about the betting on anything because it was just sports, but there was a Vox article by Dylan Matthews noting, "People bet on sports, why not everything else?" he was asking. Author Danny Funt says, "It seems like everything is gambling now. Prediction markets like Kalshi and Polymarket let you bet on everything from Super Bowls to midterm elections, to award shows, to the weather, to the word celebrities and politicians will say during public appearances."

(06:48):

So folks new to this world, prediction markets, they function as event-based contracts, which sounds overcomplicated. That basically you are saying, will something happen? So people are placing a yes, no wager on whether a certain outcome will come true.

(07:02):

So will Ethan get kicked off this podcast? Yes, no. And if he does, then you win if you said yes. You lose if you say-

Ethan Cramer-Flood (07:08):

40% chance. But that will fluctuate. And if it gets up to 60, you sell your position and then you've made some money.

Marcus Johnson (07:15):

Exactly.

Zach Goldner (07:15):

And because Ethan is my coworker, I might have insider information on Ethan. And according to these prediction markets, there's really nothing against this insider information and acting upon it, which is a key point to it.

Ethan Cramer-Flood (07:28):

Yeah. So Zach can bet his salary that I'm going to get kicked off this podcast and then I'll throw the game for him and then he'll cash in and we'll split the winnings. Actually, see you later, Marcus.

Marcus Johnson (07:40):

All good. But yeah, inside training is a big problem, especially with mention markets, because mention markets are basically will someone say something or not say something. There was an earnings call by, I think it was a crypto-related company, financial services related company. And at the very end of the call, he just said five words in a row just so that they got mentioned on the call.

(08:01):

And he said he was kind of doing it jokingly, but the people who bet that he was going to say certain words, one, they got money. And so Nathan Bomey, or Bomey perhaps, of Axios noting that gambling is fast becoming mainstream across American sports, politics, and media and trading. Shifting from a fringe vice to a mass market habit whilst raising concerns about addiction, fairness, and regulation.

(08:22):

Ethan, you've just downloaded Kalshi and ticked it out for us.

Ethan Cramer-Flood (08:25):

Yeah, I did.

Marcus Johnson (08:25):

What are your thoughts on these relatively new prediction markets?

Ethan Cramer-Flood (08:30):

I mean, it's very tempting and you can nerd out a little bit because instead of just being a typical sports topics, there's all sorts of economics and politics and society and celebrity stuff. So if you think you are smarter than the markets are in terms of IPOs or investment or GDP growth or interest rates, you can find a way to leverage your expertise there in that same way that we think we know who's going to throw a touchdown or who's going to win the game by how many points.

(08:59):

That said, my understanding is that even in these prediction markets, as new and shiny as they are, my understanding is that 90% of the action on there is still just sports related. So this is a continuation of the story that we've already began.

Marcus Johnson (09:12):

So I have a number for that real quick. It's about two thirds according to-

Ethan Cramer-Flood (09:14):

That's only two thirds. Okay.

Marcus Johnson (09:16):

Yeah. Well, but of Kalshi and Polymarket, so according to the crypto investing firm Paradigm. So far this year, so again, it's only a couple of months, but this year, sports have accounted for roughly 65% of trading volume on Kalshi and polymarket.

Ethan Cramer-Flood (09:31):

Okay. So a little bit lower than I thought. But that would also be an expected outcome because, and this is part of the political scandal, is that there are still large swaths of the US where sports gambling remains illegal. However, these futures commodities trading apps, Kalshi and Polymarket, operate everywhere because they are not technically defined as gambling apps.

(09:55):

So they're under federal regulation and you're just trading futures the same way you would be participating in the stock market. So all of those people in Texas and California who are huge sports fans can get their fix on these apps because they can't access all the other ones. So things are a little bit distorted.

(10:14):

I should also mention the numbers that I started this off with, that 200 billion and 50 million, those that don't account for these new apps yet. We haven't incorporated those. These things are a little bit black box. We will attempt to incorporate whatever is happening on Kalshi, et cetera, in our future forecast. But so whatever I said before, the number's actually even higher.

Marcus Johnson (10:36):

Well, I saw this one number. Kalshi's monthly trading volume at the start of this year was about $10 billion. Last summer, six months before that, it was one.

Ethan Cramer-Flood (10:46):

Right.

Zach Goldner (10:47):

I personally live in one of those states that sports gambling is not legalized, in Utah. However, I can use Polymarket or Kalshi and I can make those bets yes or no about these outcomes of these games. And I'll tell you the big problem that this brings up, not just to states where sports gambling is illegal, but the states where sports gambling is legal. And that states originally legalized sports gambling for the main purpose of bringing in tax revenue.

(11:19):

And they're not getting the same tax revenue out of these prediction markets that they once have been having. So I think there's going to be a lot more legislation coming up because these states are going to be losing out big time from these taxes that they had originally been getting.

Marcus Johnson (11:35):

Yeah. Government not happy. Bobby Allen of NPR, well, some folks in the... Or I should say certain authorities aren't happy. Bobby Allen of NPR noting that the Arizona Attorney General has filed criminal charges against Kalshi over illegal gambling. Sports betting is regulated by Arizona gaming commission and gambling on elections is illegal in the state.

(11:56):

Kalshi CEO though, Tarek Mansour, arguing in an interview with Axios last year, that prediction markets are not gambling, to what Ethan was saying. They're saying, "We're not the same thing." Criminal charges, Kalshi is accused of accepting bets from Arizona residents, allowing users to bet on politics and operating an unlicensed wagering business.

Ethan Cramer-Flood (12:16):

I mean, to their point, it's not gambling in the same way as the stock market gambling or not. So I understand that argument, but I think it's beside the point. I think it's the distraction. So I think Zach's point is more important, and that's why you'll see in the Senate, bills have been introduced to just reclassify these apps so that they fall under a different set of regulations, which is probably what they should be.

(12:40):

Let's not argue the semantics of gambling and betting versus whatever. We all know what's happening here. Don't worry about the wording. So I think this story isn't settled yet. I mean, it's pretty clear that there's a lot of political... They're not going to be banned, I don't think, but they're probably going to have to end up under some sort of more extensive regulation than where they are now.

Marcus Johnson (12:58):

Yeah.

Zach Goldner (12:59):

But speaking of government, I feel like there's already been a lot of discourse across the country about our politicians putting in bets on the stock market. And now the prediction markets is just another way that people are able to cash in.

(13:15):

There have been numerous instances, especially in recent history of the current war that's going on in Iran, of random insiders take a massive bet on oil's future and they take advantage of that. So it's just another loophole that I think is being used across the country.

Ethan Cramer-Flood (13:33):

Although the fraud is outrageous and everyone kind of knows it and that hurts the reputation of these platforms actually because their own users don't trust the sort of fairness and authenticity of what's going on in there. So even these apps, as much as they'd like to skirt regulations, are probably aware that they're pissing off their own users as well as political leaders.

Marcus Johnson (13:53):

They don't trust them, but they also don't accept the outcomes of when they get it wrong. Bobby Allen of VPR noting there was an Israeli journalist who said he received a barrage of death threats after Polymarket traders pressured him to change details in a story about an Iranian bombing. So the betters who waged on whether it was a missile or a drone or something else could cash out.

Ethan Cramer-Flood (14:17):

Yeah. I mean, but this is happening with sports in our country where some kid, some poor 19-year-old college kid misses a free throw and then he gets death threats, not based on the outcome of the game or any competitive element, but because somebody lost a bet. I mean, it's obviously it's much worse when you're talking about war and peace, but this is a symptom of all of this.

Marcus Johnson (14:39):

Yeah. I was trying to figure out the appeal here, but I thought there was an interesting point made in The Wall Street Journal article. They cited this woman, Heather Brown, she's 33-year-old consultant, an entrepreneur in New York, saying that she likes that she can make bets on familiar subjects. Saying the barrier to entry is lower than understanding how to short a stock or stock options.

(15:00):

So I think that's probably part of the appeal here. It does seem as though young people are driving this trend. One in three Gen Z-ers have invested in or are considering investing in sports betting or prediction markets in 2026, notes our senior analyst, Tyler Brown.

Zach Goldner (15:18):

Marcus, I'll give you a note on Gen Z, I'm part of that generation. And when it comes to us, we love our quick dopamine. So if we are the TikTok generation who always needs to be scrolling for what is to keep us engaged next, with these apps or platforms, you're able to bet on who's making that next basket.

(15:38):

Every play is important to you. So it's not just watching a game over three hours, it is watching every play and that can make a big impact. And that is what's driving so much engagement into these platforms.

Ethan Cramer-Flood (15:52):

And so they're running a foul. Sorry, Marcus, I know.

Marcus Johnson (15:53):

No, please. No, no, no, please, please.

Ethan Cramer-Flood (15:54):

Just I want to play on that because the NFL who you do not want to piss off if a significant chunk of your revenue is based on sports betting, the NFL has sent some sort of cease and desist. Well, they've sent messaging to these platforms asking them to not do certain things and to hold off on other things. Because what Zach just mentioned, these very particular, very specific, easily manipulated, small little events are what they don't want.

(16:25):

So the NFL has found peace and prosperity and alignment with the sports betting apps, as we all know. It's not hard to see that the DraftKings, et cetera, their branding is all tied up with a lot of the major sports leagues now. But they don't like all of this stuff about will one pitch do one thing? Or will the one referee make one call? Or will this kick go through or not go through?

(16:50):

They're not into that. And so if you end up with a league like the NFL on your bad side, that is also a stumbling block down the road. So I wouldn't be surprised again, I don't know where this is all going to go, but I feel like there's such an opportunity and there's so much money already available that they're going to find way to make peace and to collaborate with the golden goose, which is NFL, NBA, et cetera, I think. I don't know. I mean, maybe they'll be dumb and they won't, but I feel like they'll find a way.

Zach Goldner (17:20):

I'll make a bet on where this is going to go. More FBI investigations, that's for sure.

Marcus Johnson (17:25):

Yeah. I do wonder what it does to the sport eventually as well, because people used to watch the game... Sure, there was the Michael Jordans of the world, there was the Kareems, the Magic. There were certain players that people were really drawn to, but by and large, you supported a team.

(17:41):

And then we've noticed it pivot to young people gravitating more to a player. LeBron James, he moves between teams, people kind of follow him around certain teams. Now people are watching because of fantasy football. I watch sports because I follow teams and certain players, but also because I follow some fantasy football.

(18:00):

But I'm wondering, there was a Erica Pandey of Axios was quoting a kid, an 18-year-old student at the University of Rhode Island told The Economist he struggles to enjoy watching sports without the high of betting. And so I wonder what happens if the markets... If you get rid of prop bets, if you can't bet on this person's going to score 20 points or get 10 rebounds, what that does to the interest of the sport for certain people, particularly young people. So I wonder if this backfires on certain sports leagues.

Ethan Cramer-Flood (18:30):

Yeah, they won't. I mean, they won't get rid of prop bets entirely.

Zach Goldner (18:35):

There's too much money.

Ethan Cramer-Flood (18:36):

There's too much money. It's popular. And also, you make that bet before the game starts. So it's more like the of the moment what's going to happen in the next five minutes that they don't like that's so manipulatable. But if you want to bet on whether Jalen Brunson gets 25 points or more or less, I don't think they're ever going to get rid of that.

Marcus Johnson (18:55):

That just seems too easy to-

Ethan Cramer-Flood (18:57):

They should.

Marcus Johnson (18:59):

... to manipulate, yeah, to choose whether I score a certain amount of points.

Ethan Cramer-Flood (19:03):

It clearly is. I mean, so we haven't even talked about the actual scandals that have happened. So I mean, the NBA has already, has people currently suspended and gambling investigations. Major League Baseball. I mean, one pitcher for Cleveland. This is the new type of fraud, the new type of sports betting scandal is not that you throw the game, right?

(19:25):

You as the player can maintain your competitive fire and still try to win and not feel like you're screwing your teammates or messing up your career because all you have to do is throw one pitch differently than you would otherwise have thrown. So this guy throws a ball instead of a strike and his buddies can make $500,000. Now, of course, they got caught and so his career is screwed anyway, but this is what's happening. A player pretends, they take themselves out of the game early with a twisted ankle.

(19:52):

Or what happened with the Lakers where you just had a team manager feeding insider information that LeBron James wasn't going to play that day. Again, nobody's cheating. It's not fraudulent. He did have a bum ankle or a knee or whatever and he wasn't going to play, but you just get that money out there or you get that information out there and then people can game the system.

(20:11):

So all this stuff is fraud, but it's not like back in the day where, your point shaving scandals or throwing the game. Things really obvious like that. It's really insidious.

Marcus Johnson (20:21):

Yeah. I want to talk a bit about how Americans feel about it. So the share of American adults who view legal sports betting as bad for society has gone from 34 to 43% in the last three years, up nine points, according to key research. The share who say it's a good thing is only about 8%. So the rest are indifferent.

Ethan Cramer-Flood (20:42):

Who are those guys?

Marcus Johnson (20:43):

Yeah. It's gone up because every single demographic-

Zach Goldner (20:47):

The ones who say they're winning sports gambling sake.

Ethan Cramer-Flood (20:50):

Yeah, exactly.

Marcus Johnson (20:52):

Up amongst every demographic, most notably the young men in their 20s going from close to 20%, being the least concerned group. 20% of young men in their 20s basically saying that sports betting is bad for society. And then three years later, 2025, it's 50%.

(21:08):

So they've gone from the least concerned to almost neck and neck with the most concerned age group. The share who say sports betting is bad for sports, that what's bad for society is bad for sports, of all people, it's gone from 33 to 40% over that time. So, gents, what's your take on American sentiment towards how betting impacts sports society? And how much does this actually matter?

Zach Goldner (21:30):

I think the overall sentiment is honestly probably quite negative. Sure, you do have those who are participating, who are staying engaged, and do really like it, and it keeps a boring game more exciting to them. But overall, I think that sentiment is changing.

(21:46):

You brought up that Pew Research study, but once sports gambling was legalized, it's been in everyone's faces all the time. You turn on the TV, you'll constantly get Kevin Hart doing a celebrity endorsement on DraftKings or every other commercial will be towards that. So it demands a lot of time on TV and any sports broadcast you're following, whether ESPN or others.

(22:10):

And it doesn't seem like there's too much room to air it out. You're seeing live odds being baked into every broadcast, entire segments being brought onto it as well. And what that is doing too is you have a new generation of content creators who are live-streaming some of these events too, as they're reacting to how many times Jerome Powell brings up inflation.

(22:34):

So it is really becoming a culture craze to that point as well. And I think that people are getting a little bit sick and tired of it. People are going into debt from it as well, and they can't seem to get away from sports gambling.

Ethan Cramer-Flood (22:47):

I'm surprised those negative numbers aren't higher actually, Marcus, that I would've thought that at this point... So by our numbers, 20% of adults are participating. So you might think that those folks would be leaning, maybe the ones leaning a little bit towards positive or maybe just neutral. Although maybe negative depending on how badly their lives are going.

(23:08):

But I would've thought that the people that aren't participating would share Zach's opinion, which is like, "This is just super annoying." And we already live in a conspiracy obsessed country, a conspiracy obsessed world. And before the proliferation of sports gambling apps, people still sometimes didn't trust the outcome of their favorite team, sporting events, what's going on with the refs.

(23:30):

And now it just seems like 100 times worse where when you're watching a game, you're like, "Is this the real outcome here? Was everybody here giving the max effort?" That one random backup and that turnover, why did that happen?

(23:44):

So there's so many ways now to not trust and therefore not enjoy something that you're watching. And most people are not gamblers. And it's got to be really annoying that all the rest of us are ruining it for them because now they have to think about these things and they have to see it in front of them all the time. So I would expect those negative numbers are going to go up.

Marcus Johnson (24:04):

Yeah. Zach, you mentioned Kevin Hart. I mean, there was a piece I was reading by a college student, Eli Thompson, he wrote an essay in The Wall Street Journal and he was noting that anecdotally, he knows lots of people who have lost hundreds of dollars each, college kids. Often lying to their families to get money to keep playing these markets.

(24:26):

He noted the social fallout can be tough. Some young people ghosting friends entirely because of their embarrassment. Struggling with classes, staying up late glued to the apps, skipping homework. And it's easy, Nathan Bomey of Axios was making this point. It's easy to hide this from other people because you're doing it on apps. You're not having to go place a bet somewhere where someone can see you do this.

(24:49):

And Jamie Costello, director of programs for the National Council on Problem Gambling was making that point. Kevin Hart comes up because he was saying, some of his friends were saying, "Kevin Hart's endorsing it, how bad can it be?" And so I think these celebrity endorsements have definitely been intentional to try to legitimize some of these platforms.

Ethan Cramer-Flood (25:12):

Also, Kalshi and Polymarket have that almost like social media-esque addictive nature because it's all the time. So you can sit there and watch your positions go up or down and you're trying to play the markets and it's never off. Whereas if you bet on the Knicks game, there's nothing to do until the Knicks game actually happens. You place a bet and it just sits there and then you wait until the end of the game to see if you want or lost.

(25:34):

But on Kalshi, it's all the time. Every minute, every second of every day, the value of your positions are going up and down. And maybe you've got 100 different things out there and you can watch all of them go up and down. So yeah, you're just going to be sitting there staring at the app if you're bad enough.

Zach Goldner (25:47):

You can also make a futures contract on anything. There are contracts on the return of Jesus Christ in 2026.

Ethan Cramer-Flood (25:55):

That's true.

Zach Goldner (25:56):

Or the US invading Iran and having our troops being on the ground. But it doesn't just stop at sports, which keeps the options limitless.

Ethan Cramer-Flood (26:07):

Yeah, which makes it sound like this is all going to get worse before it gets better.

Marcus Johnson (26:10):

Yeah. This does seem to be the area of growth. My question was, are we just gambling more as a society? But there was some Pew Research showing that there's different types of betting. There's with friends and family and private betting pools, fantasy leagues, casual bets. That's been the same over the last three years. So that stayed the same about 15%.

(26:31):

There's in person at casino, racetrack, betting kiosk, that stayed the same, about 8%. The growth has been, as we've been talking about in these online using betting apps, sportsbooks or casinos, that's gone up from six to 10. So that's where the growth is happening.

(26:45):

We talked a lot about the negatives of sports betting, of betting on all these things. And so it will lead me to believe that no one would want to touch this in terms of advertising, in terms of, I don't know, media. It just seems like an area that people might want to stay away from.

(27:08):

Ethan, I'll come to you first. What do you think of when the question comes up of how brands can get involved in this responsibly? How are brands underestimating the backlash here? Is there some kind of reputational risk if public sentiment turns against betting? What would you say to folks who are on the periphery of this space looking to perhaps get involved?

Ethan Cramer-Flood (27:29):

Yeah, for sure. I mean, this seems like a no-go, but it depends from what angle you're thinking about it. So if you're trying to leverage the popularity of these apps and work with them for your own marketing purposes, that just seems extraordinarily dangerous and very risky. You really got to put a lot of thought into that, depending on your positioning and your customer base, what angle you're going for.

(27:53):

But what's happened is not that angle, it's the other way around. It's the amount of money that the sports betting apps and now the futures trading apps have put into the advertising system themselves. So I mean, when all of this started to get legalized a few years ago, there were so many ads on TV and on CTV for the likes of DraftKings and FanDuel and all the others competing with them, that it made a material difference for our outlook for TV ad spending for the year.

(28:23):

They were spending so much on their own ads. And then now they've all, as we've alluded to throughout this session, they all have these sort of strategic tie-ups with ESPN and with the major sports leagues, right? Each other's brands are all over each other's stuff. And then you watch SportsCenter and they'll have a whole segment on gambling, the betting advice for today.

(28:45):

Or you'll be watching the Knicks game and they'll have a 30-second little spot about how the odds have changed, but these are all sponsored. Wait, so it's the other way around. It's the companies in the sports world that are allowing these platforms to give them money and they're profiting hugely from it. So on that angle, that seems to be working so far.

(29:07):

I don't know. It seems risky to me, but the NFL's not going to turn down that much money. Disney, I mean, Disney doesn't seem to match Disney's brand affiliation. But ESPN and ABC have no problem taking lots and lots of money from these guys.

(29:23):

But on the other side, if you're just some other brand and you're trying to figure out how can I get access to these 50 million users? Or how can I become a part of this, I would be very careful about doing that.

Zach Goldner (29:34):

The money and sponsoring to sports gambling is not necessarily new. If you were to take a look at March Madness, you've had insurance companies that have sponsored ESPN's Winning Bracket, promoted pools as well. So yes, it's a very risky-

Ethan Cramer-Flood (29:53):

Zach, come on. I mean, that seems more wholesome, right? Filling out your brackets.

Zach Goldner (29:58):

Hmm, yeah.

Ethan Cramer-Flood (29:59):

Come on, that's apple pie.

Zach Goldner (29:59):

It's a gateway gamble.

Ethan Cramer-Flood (30:02):

Yes, it is.

Zach Goldner (30:03):

It's a gateway gamble. They know what they're doing. And I'm being serious about the gateway gamble as well. I think you have seen forms of gambling or random odds into different video games, whether it's NBA 2K or Madden. You have these game modes that are called Ultimate Team where you would get these card backs and there'd be complete random based probabilities on what cards you'd get.

(30:33):

And sure, it's not real money that people are paying, but they're paying for a virtual currency and that virtual currency will give them the odds at getting certain players. So it all kind of starts up from one place. It can be from an early age. And then once you reach the legal age of gambling, then you're already hooked into these ecosystems.

Ethan Cramer-Flood (30:51):

Yeah. And you mentioned fantasy sports earlier too, right? And that's another way that we all sort of train ourselves as kids, which is basically gambling. Even if there's no money at stake, it's still kind of a gateway.

Marcus Johnson (31:01):

Yeah.

Zach Goldner (31:02):

We should bring back gentleman's bets.

Ethan Cramer-Flood (31:05):

Yeah, just a handshake.

Zach Goldner (31:06):

Yeah. Good old handshake.

Marcus Johnson (31:10):

Zach, anything to add in terms of the concerns wading into this betting pool?

Zach Goldner (31:20):

Yeah. I think Ethan handled that quite well. Gambling's addictive, it's got financial risk, and it doesn't really fit with most brand identities, whether it's the CPG Company or a different family brand. It's not necessarily what a lot of companies want to align themselves with. So they should be very careful of where to dabble in.

(31:40):

But again, the content is really growing. There's more options around it as well for companies to look at, and more influencers who are posting themselves doing all these live bets. So there's more eyeballs that are going to it. The question is whether or not they want to enter into that space.

Ethan Cramer-Flood (32:01):

Even though we have presented a very negative perspective here, and I do think that we will ultimately be right in terms of maybe a turn of the tide in society's opinions and political opinions. We do have forecasts here and they show growth. So all those numbers about how much the total handle is and how many people are participating, that's still going up.

(32:23):

It's not going up by absolute gangbusters, but it's still going solidly up. It's going to be bigger this year, it's going to be even bigger next year. And there are still a bunch of states out there where it remains illegal and they may continue to flip. So every time a new state legalizes this because they can't resist the tax dollars, again, I'm talking about the sports betting apps. They can't resist the tax revenue, and then that opens up a whole new set of people that otherwise aren't even there yet.

(32:51):

So no matter how many negative headlines we see, I think for at least the next several years or even longer, all these numbers are just going to keep going up.

Marcus Johnson (33:01):

Yeah. You mentioned that there's some other states still to come online in terms of sports betting. We mentioned that there are 40 which have legalized it, 10 that haven't, but of those 10, two of them are Texas and California that Ethan mentioned earlier at the top of the show. That's 70 million people right there. You add Georgia to that, that's another 10 million. And then it's Idaho and it's Alabama and some others, it quickly adds up to about a third of the country, still yet to come online.

(33:27):

I want to close with this, just circling back to what we were saying at the top and touching on what you guys are saying here, which is we've talked about the concerns that people have about this space, but it's such huge business. And I think there was one stat from Kearney 100. The global, we're talked about in the US, global sports market, everything, is $417 billion.

(33:50):

That's media rights, sponsorships, ticket sales, betting. Everything's included in that. So global sports market, 417 billion. Media rights, about 61 billion, huge, obviously. 52 billion for sponsorships and in-venue ads. Game day takes about 34 billion.

(34:10):

Betting is bigger than those three combined. It's bigger than media rights, sponsorships, and game day. It's $133 billion of the 417 is for betting. It's nearly a third of the total global sports industry. We talked about fantasy sports. That's 27 billion compared to betting's 133. So just to [inaudible 00:34:32].

Ethan Cramer-Flood (34:31):

Yeah, I believe it. I believe it. We do love our sports.

Marcus Johnson (34:34):

We do indeed. We do, especially in the States. As well, you should. You got some good ones. We could probably get rid of hockey.

(34:41):

Anyway, that's what we've got time for for today's episode. Thank you so much to my guests for hanging out with me today. Thank you to, Ethan.

Ethan Cramer-Flood (34:47):

I think I won the bet. That was a great podcast. You guys owe me money.

Marcus Johnson (34:51):

It was all right. Me and Zach really carried that. Zach, thank you for carrying the show.

Zach Goldner (34:55):

Yeah, I fold, Ethan. You win.

Marcus Johnson (34:58):

Hope to see you guys on the show next month, not these two. Maybe, we'll see. But everyone listening, hope to see you guys.

(35:05):

Then thank you to the production crew, Danny, Lance, and Luigi helping out with this one. And thanks to everyone for listening to In The Game an EMARKETER sports marketing podcast made possible by Verve.