Spiralling Costs on Sportsbook OperatorsOne of the most troublesome issues in the online casinos and betting arena today is the daunting cost of the rights to use sports content. The online sportsbook environment is still seen as a likely boom market, with substantial long term growth opportunities. However, the cost of utilising sports data and pictures necessary to make compelling content for the betting customer is ever increasing.
One market in which this issue has come to a head is in the UK. The UK is moving closer to the concept of having to establish the “right to bet” (ie asking a third party’s permission, such as the Premier League, for the right to bet in relation to an event) because of the difficulty of creating a commercial gambling product without the rights protected pictures and data.
From a European Football (soccer) betting perspective, historically, the only rights that book makers were interested in were the football fixture lists (pictures were not important in an offtrack betting environment) for which a reasonable licence fee was paid. Today, the rights to pictures are important due to the expansion of the online environment where pictures and data become an important part of the product blend. This problem becomes even more an issue in the idTV market.
ISL made it clear in their initial negotiations for the World Cup 2002 picture rights that “interactive rights” were being withheld. The assumption was also made that since television broadcaster BskyB paid £22.5 million for interactive rights for their Premier League pictures, they must have assumed that the Premier League was capable of withholding those rights. The Football Data Co, appointed by the Leagues in the UK, has taken this one step further and is seeking to licence all use of football data by commercial organisations -including bookmakers and journalists. The rationale for them seeking such licences is difficult to fathom, but all tickets to the matches are now issued subject to the condition that there be no commercial exploitation of the data by an individual attending the ground.
Certainly, in the idTV environment, the collapse or near collapse of digital operators in the UK would suggest there is no pot of gold at the end of the idTV rainbow. This is bad news for gamblers because as operators struggle to make money in the space, the players will have fewer bookmakers to choose from. Additionally, the higher cost of obtaining the right to offer bets on particular events will lead to bookmakers that do continue to exist offering poorer odds.
In contrast to the situation in the UK, some US legal pundits presume that hyperlinks to official league sites may also violate the rights of the league. In one example, the National Football League sued the owner of the website www.nfltoday.com on the basis that nfltoday.com, by linking to the NFL, was suggesting that the NFL endorsed gambling. Since the NFL felt that gambling was detrimental to its image it took recourse on www.nfltoday.com. This represents another extremist attitude, and erects a further road block for sportsbook operators who are keen to provide up to date content to the betting public.
In order for the online sports betting industry to reach its full potential, and for that industry to offer enough consumer choice to make betting worth while for the punter, online and idTV bookies are going to need to settle the new and complex media rights issues that are just beginning to emerge because of this new and burgeoning market.