The NCAA is the last major holdout in the growing set of relationships between the sports betting industry and US sports leagues.
The NCAA, of course, was one of the organizations suing to uphold PASPA for years. But while pro leagues have flipped and cautiously embraced sports betting, the NCAA largely remains on the sidelines.
It’s a stance that raises eyebrows around the industry. The NCAA’s reluctance has done nothing to slow down widespread betting on college sports. And now the organization faces a looming financial crisis due to the coronavirus pandemic.
The money is there for NCAA
College football and basketball are huge revenue drivers for US sportsbooks, despite a handful of states imposing partial bans. But somewhat ironically, the NCAA isn’t being compensated for it.
What’s more, it would be simple for colleges to start making money out of betting, assuming if the 2020 season goes ahead.
The association already has a 10-year exclusive data collection deal with Genius Sports, but that data is not currently passed onto bookmakers.
What is the impact of the NCAA holdout?
The main consequence of this reticence is the lack of an official league data feed and, therefore, the lack of a truly competitive in-play betting product. College games instead are often data-scouted from TV, resulting in time delays and fewer games being covered.
As pro sports continue to launch their official data feeds and the in-play product improves, college sports betting could suffer by comparison.
So, how likely is the NCAA to soften its stance and embrace gambling?
NCAA more engaged than it appears
It’s worth understanding the association’s current stance and why it’s so resistant to betting. The organization only recently lifted its longtime ban on hosting national championship events in states with single-game wagering.
The NCAA supports a federal framework for legalized gambling.
It notes: “While we recognize the critical role of state governments, strong federal standards are necessary to safeguard the integrity of college sports.”
Despite multiple threatened proposals, a federal bill on this is not moving any time soon. But one industry source tells LSR that the NCAA is also quietly engaging with state-level stakeholders. It deserves credit for trying to understand the intricacies of the industry.
What else is in play?
Beyond those stated concerns about integrity, the NCAA has less to gain and more to lose than the professional leagues. It is not going to sign marketing deals with casinos or sportsbooks. That means the only tangible revenue upside comes from selling data to the betting industry.
The NFL is thought to be earning something like $50 million annually from its betting data deal with Sportradar. That figure isn’t to be sniffed at but it isn’t game-changing for an organization already making $1 billion a year from sports.
Unlike pro leagues, too, the NCAA does not exist just to make money, though it makes plenty.
“They don’t have team owners hawking them for more revenue,” said Bill Pascrell, a lobbyist at Princeton Global Affairs. “They need to find the delicate balance between being protecting the amateur status of their athletes while also recognizing the contributions of those athletes.”
Even plans to allow student-athletes to profit from their image might not extend to betting.
Is a betting deal Pandora’s box?
Compensation is a key issue. The NCAA is already fighting a war of public opinion about compensating student-athletes.
If it announced a major deal to make money from betting on college games, the media and the public would want to know how athletes are getting their fair share.
“This is Pandora’s box,” Pascrell said. “They have to be very careful. Once you start compensating players, it’s going to change the whole college sports ecosystem.”
Progress is coming, like it or not
Despite these issues, Pascrell is confident the association is coming around to betting.
“There’s no incentive for the NCAA to hold out,” Pascrell said. “They’re looking at a way to structure this with a focus on responsible gaming and integrity. I think we’re not far away from a deal.”
Pascrell estimates the NCAA will come to terms with the industry in the next two years, and it’s a positive outlook echoed by the bookmakers themselves.
Betting can help college sports
Paul Chopin, a consultant who’s overseeing trading at Golden Nugget, says the NCAA needs to embrace betting to stay relevant to viewers.
“If you want college to be entertaining and sustainable, then the betting product can help with that,” Chopin said.
“People don’t like to talk about it, but it’s true; as pro sports embrace official data and the product evolves, the customer will demand similar experiences across colleges. So you need a robust betting product and trading off 10-20 second delay TV feeds isn’t the way to go.”
Chopin warns that college sports will risk losing fan engagement if it continues to refuse to work with the betting industry. For Golden Nugget and other operators with a big Southern presence, college football handle is on a par with NFL betting.
If it’s going to stay that way in 2020 and beyond, the NCAA will need to welcome the betting industry.