Former MLB Commish Says Sports Betting Is Reason For Skyrocketing Franchise ValuesFay Vincent Believes Sports Betting Is Fast Approaching |
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While it’s not yet clear what a widely regulated U.S. sports betting market would look like, the professional sports leagues have been preparing themselves for a transition. According to a former commissioner of Major League Baseball, the value of sports franchises has ballooned in recent years thanks to federally approved sports betting approaching on the horizon.
Former Major League Baseball Commissioner Fay Vincent told ESPN that sports betting is “precisely why these prices are going up,” adding that a massive amount of new money is “going to flow to sports if gambling is permitted.”
The American Gaming Association estimates that the amount wagered on sports annually in the U.S. is $150 billion, with only about $4.5 billion of it happening in Nevada’s regulated market. The Silver State retained about five percent of the wagers last year in the form of revenue.
In June, the U.S. Supreme Court said that it will hear New Jersey’s arguments that the Professional and Amateur Sports Protection Act of 1992 (PASPA), which limited traditional sports betting to Nevada, should be repealed. The Garden State has for a handful of years tried to circumvent the federal law, but the leagues stepped in to block the move. However, these days they have warmed to gambling. Even the NFL, the stanchest opponent to sports books outside of Nevada, has softened its stance and is putting a team in Las Vegas.
How much have franchise values grown lately?
Two seasons ago Forbes reported that the average baseball team was worth $1.2 billion, 48 percent more than a year prior. That was the biggest year-over-year gain on record for the MLB. Last season, the average value was $1.3 billion, up seven percent year-over-year. According to Forbes, the average value of an NBA franchise is $1.36 billion, three and a half times more than five years ago. As of last fall, the average value of an NFL team was $2.34 billion, a 19 percent increase over the previous year.
Things like richer TV/media deals, new collective bargaining agreements, stadium construction and franchise relocation have helped fuel the growth for teams in the leagues, but according to Vincent the reason “no one seems to be paying attention” to is sports betting.
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