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MGM, the NBA, & the Future of Sports Betting

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Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains dives into the deal between MGM Resorts (MGM - Free Report) and the NBA, which could lay the foundation for the future of sports betting in the U.S.

The world’s richest basketball league and the casino and resorts giant announced last week a multi-year partnership that will make MGM the official gaming partner of the NBA and WNBA. The NBA became the first major U.S. sports league to partner with a sportsbook operator just a few months after the Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992.

The NBA, led by Commissioner Adam Silver, has set itself up to capture a major new revenue stream. The deal will see MGM use the NBA’s logo and highlights. But the real core of the partnership comes in the form of official league data that will help fuel live in-game betting.

The deal will also impact the NBA’s biggest TV partners Disney (DIS - Free Report) and Turner (T - Free Report) , which are paying a total of $24 billion to broadcast games over a nine-year period. Some of the NBA’s biggest sponsors and partners, including Nike (NKE - Free Report) , Anheuser Busch InBev (BUD - Free Report) , and PepsiCo (PEP - Free Report) are also set to be impacted, especially as more states legalize sports betting.

MGM also expanded its sports betting push last week through a partnership with London-listed GVC Holdings PLC. Meanwhile, legal sports betting kicked off in Mississippi, becoming just the third in the U.S. outside of Nevada. Caesars Entertainment (CZR - Free Report) also announced that it expects to open sportsbooks at its Mississippi casinos before football season starts.

On top of all that, DraftKings rolled out its first official sports betting app. The DraftKings Sportsbook app began its invite-only period in New Jersey in a move that could soon see the firm dominate this vital sports betting market while others race to catch up.

Investors should also note that DraftKings rival FanDuel, which recently merged with Irish bookmaker Paddy Power Betfair PLC (Paddy Power Bet - opened a sportsbook at Meadowlands Racetrack in New Jersey. But the end goal for most of these companies will be similar to what William Hill does throughout the UK, which is offer a massive sports betting app, filled with in-game wagers as well as physical sportsbooks.

As a reminder, if you feel that we missed something, or if you have any topic suggestions, shoot us an email at podcast@zacks.com. Make sure to check out all of our other audio content at zacks.com/podcasts, and remember to subscribe and leave us a rating on Apple Podcasts.

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