Cost of ‘official’ team and league partnerships for Sportsbooks is slowly decreasing

Since the expansion of sports betting was made possible by the Supreme Court in 2018, sportsbooks have made “official” partnerships with leagues and teams in Canada and the US. These partnerships offer a special type of legitimacy that not every sportsbook can provide. However, these partnerships come at a cost. A high one to be exact. 

The NFL partnered with DraftKings, FanDuel, and Caesars in 2021 to make them the “Official Sports Betting Partners” of the NFL. According to Caesars, their sports sponsorships/partnership obligations accounted for $556 million as of March 31, 2024. Surprisingly, that is down from the $605 million it was at this past December. These “official” partnerships are no joke and they can cost sportsbooks hundreds of millions to maintain.

Using Caesars as an example of what sportsbooks have to do to maintain their “official” partnerships

According to Caesars, their obligations tied to their partnerships were $556 million as of March 31, 2024. That’s slightly down from $605 million at the end of 2023. In March of 2023, their “official” partnerships added up to $847 million. While those numbers are still substantially high, the year-to-year decreases can be seen from March 2023 to March 2024. Reportedly, some of Caesars’ contracts extend through 2040. Most notably their 20-year partnership with the NFL was signed in 2021. 

Last week, a press release from the sportsbook noted,

“Agreements with certain professional sports leagues and teams, sporting event facilities and media companies for tickets, suites, advertising, marketing, promotional and sponsorship opportunities including communication with partner customer databases.” - Caesars Sportsbook

What other sportsbooks have partnerships with sports leagues and teams?

Flutter Entertainment PLC is a parent company of the sportsbook FanDuel, one of the largest and most profitable in the United States. Along with paying for the “official” partnerships, there were other “purchase obligations” that had to be made. By the end of 2023, their total has reached $2 billion. They paid out $763 million in 12 months. 

DraftKings reported $1.4 billion for their obligations for all of 2023. There are perks for the sports leagues and teams when they sign these partnerships. However, they come at a substantial price. As time passes, these deals will continue to decrease.