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NFL further warms to gambling by allowing stadium betting lounges

The National Football League famously fought against gambling for years, citing concerns about the “integrity of the game.” In 2015, it shut down a fantasy football convention in Las Vegas headlined by quarterback Tony Romo for its mere whiff of gambling; in 2016, as the other major leagues inked official league partnerships with daily fantasy sports sites DraftKings or FanDuel, the NFL allowed its teams to make team-level deals but did not enter any league-wide deal until 2019.

Now, for its 2020 season, the NFL will allow teams to sign with casino and sportsbook sponsors and build out betting lounges inside their stadiums, the league told teams last week, first reported by Sports Business Journal.

What the betting lounges will look like

Only teams with legal sports betting in their state (that number is 14 and growing quickly) will be able to sign such sponsorships, and only with casinos or sportsbooks that are licensed in the state.

Casino sponsors of teams will be allowed to use the official team logos in their advertising and marketing. In other words, you could soon hear a casino in Pennsylvania advertising itself as “the official sportsbook sponsor of the Philadelphia Eagles.”

As for the physical lounges, they will not have betting windows or physical bet-taking of any kind—the league is still prohibiting that—but can have signage of the sponsor and monitors showing odds and bets. The sponsors can also use such lounges to sign up customers. The lounges will be confined to the area of stadiums known as the upper bowl.

These will basically be designated physical spaces for mobile betting on smartphones.

Silquia Patel, (R), 29, celebrates after making her bets at the FANDUEL sportsbook during the Super Bowl LIII in East Rutherford, New Jersey, U.S., February 3, 2019. REUTERS/Eduardo Munoz
Silquia Patel, (R), 29, celebrates after making her bets at the FANDUEL sportsbook during the Super Bowl LIII in East Rutherford, New Jersey, U.S., February 3, 2019. REUTERS/Eduardo Munoz

The lack of physical betting windows was “a key point of focus from our committee of owners, and also in our fan research broadly,” Chris Halpin, the NFL’s VP of strategy and growth, tells Yahoo Finance. “We didn’t want betting windows or kiosks or signups in the broader concourse where all fans are exposed to it, including underage fans but also fans who are not interested in betting and don’t want to be overwhelmed by it. Relative to our brand, having it within lounges or on mobile is the right way to do it, and it’s also really where the market’s going. That’s the approach we feel comfortable with.”

The NFL’s official casino partner is Caesars, and its official daily fantasy sports partner is DraftKings, but teams are still free to make their own team-specific local casino deals, and many have. But as legalization grows, the league is allowing team sportsbook sponsorships since, as Halpin points out, “More than half our teams will have state legalization in their home markets next year.”

Gillette Stadium (home to the New England Patriots), AT&T Stadium (Dallas Cowboys), and Arrowhead Stadium (Kansas City Chiefs) all have designated DraftKings fantasy sports lounges already, and the new betting lounges would look basically the same; what’s new is the ability for teams to have official sportsbook sponsors.

In Atlantic City, a number of brick-and-mortar casinos have been building out similar lounges inside their casinos, under the reasoning that if people are going to bet on their phones, the casinos would still like the bettors to do it in their casinos.

A person involved with the construction of such spaces, speaking to Yahoo Finance not for attribution, sums up the casinos’ thinking this way: “We’d rather people sit on their phone in our casino rather than somewhere else, because then they'll go to our restaurant, buy a drink here, or maybe migrate to a slot machine.”

FILE - In this May 2, 2019, file photo, the DraftKings logo is displayed at the sports betting company headquarters in Boston. DraftKings announced Monday, Dec. 23 it is merging with two companies and taking its stock public. It will retain the DraftKings moniker and complete its merger with gambling tech firm SBTech sometime in the first half of 2020. (AP Photo/Charles Krupa, File)
DraftKings headquarters in Boston. (AP Photo/Charles Krupa, File)

NFL was the last holdout league

The lounges are just the latest example of the inevitable yielding to sports betting by the last league to give in.

In the run-up to May 2018, when the U.S. Supreme Court struck down PASPA, the federal ban on sports betting, the NBA and other leagues had argued that if states other than Nevada were going to have legal sports betting, the leagues ought to be paid an “integrity fee” percentage of each bet. The NFL stayed away and did not support the calls for integrity fees.

Immediately after SCOTUS struck down the federal ban, allowing states to legalize sports betting on a state-by-state basis, NFL Commissioner Roger Goodell issued a statement reiterating, for the umpteenth time, that “there is no greater priority for me... than protecting the integrity of our sport” and asking Congress “to enact uniform standards for states that choose to legalize sports betting.”

Since then, 13 states have legalized sports betting, joining Nevada for a total of 14 states with some form of legal sports betting. Another handful have bills in process to legalize. (Not all of those states allow mobile sports betting, which requires separate legalization.)

In the months following the SCOTUS decision, all the big U.S. pro sports leagues took fast action—except the NFL. By August 2018, the NBA announced MGM as its first official casino partner. In October, the NHL also made MGM its first official casino partner, and in November, MLB also signed a deal with MGM.

The NFL took until January, and went with a different first casino partner, Caesars, in a sponsorship that still did not include allowing betting.

Yet the NFL has gradually given in to sports betting, even if not quite at the welcoming level of the NBA. “I think our approach has evolved,” says Halpin. “In a PASPA world, there really wasn’t much to talk about. And our biggest concern historically was: If sports betting was allowed, how responsible would the frameworks be that states enacted to make sure there were strong integrity requirements, consumer protections, all these things that were really important to us. That was an unknown. What we’ve seen now is that states are by and large enacting thoughtful, effective frameworks. I think we feel good about it now, we’ve spent more time with sportsbooks and we feel good about how the market is developing.”

Las Vegas is the center of that shift in strategy, a fact that will be on stark display in April when the league hosts its draft there, a huge event that gets bigger and brassier every year. Drafted players will get on a boat and ride across the fountain of the Bellagio Hotel and Casino to shake the commissioner’s hand.

Then, when the season begins, an NFL team will call Las Vegas home, joining the NHL’s Golden Knights. MLB and MLS are rumored to be eyeing the city next.

Daniel Roberts is an editor-at-large at Yahoo Finance and closely covers sports business. Follow him on Twitter at @readDanwrite.

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