Sinclair Bets on Sports Gaming to Pump Up Viewership in Bally's Deal

Bally's and Sinclair’s partnership to integrate gaming content into Sinclair’s 190 TV stations and 21 regional sports networks will be a factor in pending negotiations about distribution with sports teams, said Sinclair CEO Chris Ripley on a Thursday call. “It’s a proven phenomenon” from research and oversees markets that “real-money” sports betting “creates a virtuous circle of viewership,” said Ripley. “More gaming creates more viewership, creates more gaming, which creates more viewership.” Gaming will be a “huge megatrend in sports watching" that will ultimately make sports and sports rights more valuable, Ripley said.

The overall vision is to “to gamify sports … to make watching sports like a videogame,” said Ripley. Sinclair believes sports betting will increase the appeal of sports, especially to younger fans. Gamification of live sports “will enhance the fan experience" and “make it more fun to take action on the game,” said Ripley. Ultimately, the companies want to make the ability to watch and bet a “single-screen experience” or a dual-screen experience with the second screen “used for control.” The more viewers that Sinclair can convert from traditional linear viewing to the new app, or to Bally’s app, "the faster we can get to that vision.”

The app’s first iteration, when it launches in the spring, will have authenticated streaming for existing subscribers. Soon after, Sinclair will offer direct-to-consumer experiences for people outside the pay-TV bundle, Ripley said. He referenced Sinclair’s “pretty aggressive plan to transform the RSNs through direct-to-consumer, through gamification and through fandom-based community.” It plans to launch its DTC offering next year.

Citing survey data, Ripley said 97% of sports bettors watch live sports vs. 78% of non-bettors, and bettors watch 4.1 teams vs three. The age group most interested in sports betting is 18-34, he said, calling the segment “the most valuable demographic” for media companies. Sixty percent of that demographic is interested in sports betting, he said.

Under the 10-year agreement, Sinclair and Bally's will jointly market, design and integrate products on a state-by-state basis, they said. The 21 RSNs, which Sinclair bought from Fox last year for $9.6 billion, will be rebranded under the Bally name. The agreement covers Tennis Channel and Sinclair's Stadium channel. The deal positions Sinclair to eventually buy a minority stake in Bally’s of up 30% of its common stock, pending regulatory approval. Sinclair’s RSN portfolio will receive annual naming rights fees and a percentage of Bally’s Interactive’s marketing spending. Bally’s itself is a recent name change, a Twin River Worldwide rebranding last month.

Bally’s agreed to buy sports betting platform provider Bet.Works for $125 million, it said Wednesday. Bet.Works, which serves operators in New Jersey, Iowa, Indiana and Colorado, has the technology stack and turnkey solutions for sports betting and iGaming. The Bet.Works acquisition, due to close in January, will allow Bally’s to launch a business-to-business-to-consumer business model, it said.

Bally’s sees the U.S. online sports betting and iGaming gross gaming revenue opportunity as $2.6 billion this year, $12 billion in 2025 and $50 billion at maturity, said CEO George Papanier. Shows about betting will help fill space around live sports events, Ripley said, giving bettors statistics and strategies. Papanier believes Bally’s can take 10% of sports betting and iGaming market share.

The two companies will co-develop apps to create additional monetization opportunities and content offerings, they said. The partnership isn’t exclusive. No advertising will be given away under the partnership, said Ripley. Bally’s messaging will be integrated into game, pre-game and post-game content, and it committed to buy additional advertising to create calls to action, he said. There’s no revenue share for Sinclair from betting receipts, he said.

Fans weighed in on the partnership on Twitter Thursday. @1BTerrace tweeted: “I do not want to see constant gambling promotion and engagement during games. It needs to be on a secondary channel, not the main broadcast.” @scoobydeux called the move “obscene. How can we keep this away from our children and still let them watch the games. One more family value destroyed.” @cigarmike said about St. Louis Cardinals' announcer Dan McLaughlin: "I’m gonna miss Danny Mac if this comes about the way it seems. No way I’m listening to them talk about this during the game." @Matthew83128 tweeted: "I’m willing to bet viewership will drop drastically, especially in middle America and it won’t last long." @MikeSigers saw opportunity: "I wanna bet The Over on K’s [strikeouts] for our hitters every game."