By Scott Soshnick
The NBA’s Philadelphia 76ers and NHL’s New Jersey Devils signed a multiyear marketing agreement with the website partypoker, becoming the first major U.S.-based professional sports teams to align themselves with online gambling.
The agreement with the unit of Gibraltar-based Bwin.Party Digital Entertainment Plc, the teams and Prudential Center, the arena home to the Devils, comes about a year after New Jersey legalized online gambling, which is expected to be a $7.4 billion business in the U.S. by 2017, according to the research firm H2 Gambling Capital. Nevada and Delaware are the only other states to allow online gambling.
“This is our flag in the ground that we do things differently,” said Scott O’Neil, chief executive officer of the National Basketball Association’s 76ers, the National Hockey League’s Devils and the Prudential Center. “We’re looking for groundbreaking opportunities with companies willing to take chances.”
The agreement is worth at least $10 million, according to a person with direct knowledge of the deal.
Former U.S. Olympic Committee Chief Marketing Officer Rick Burton — a previous commissioner of the Australian Basketball League, which allows gambling-related sponsorships — called the agreement “logical.”
“You’ve got all these teams and leagues where everybody is being told you better be able to sell, but every possible category has been explored,” said Burton, a professor of sports management at Syracuse University. “Here, there’s a salesman who says, ‘I can get you big money, but you have to let me in the gambling space.’ ”
Richard Peddie, the former chief executive officer of Maple Leaf Sports & Entertainment, which operates the NHL’s Toronto Maple Leafs and the NBA’s Toronto Raptors, said he isn’t surprised these teams are the first to align themselves with a gambling site. The Toronto teams rank in the lower half of franchise valuations by analysts in their respective leagues.
“Both teams will take even more risks and push the envelope when it comes to marketing,” Peddie said. Previously, the Maple Leafs had a marketing agreement with an online gaming company.
A group led by businessman Josh Harris, co-founder of Apollo Global Management LLC, bought the 76ers in 2011. He assumed control of the Devils last year. The Sixers are worth $418 million, 20th in the 30-team NBA, according to rankings by Forbes Magazine. The Devils are worth $320 million, 20th out of 30 NHL clubs, Forbes said.
O’Neil said there are 60 million online poker players in the U.S., and that 2 million people a year attend events at the Prudential Center.
“We have this moment in time that allows a company like ours, which is unique, which frames New Jersey, a pretty incredible opportunity,” O’Neil said.
New Jersey Gov. Chris Christie, who signed the online wagering law last year, also has supported introducing sports betting in the state. A U.S. appeals court in September blocked New Jersey’s attempt to expand its gambling business to sports, saying the state’s effort conflicts with federal law, which limits it to four states.
Expansion of sports betting has been opposed by the major professional athletic leagues, including the NBA and the NHL.
Rules in the National Football League and Major League Soccer prohibit teams from accepting online gaming sponsors. Major League Baseball spokesman Pat Courtney said it considers such deals on a case-by-case basis, adding that he wasn’t aware of any existing agreements.
Mark Tatum, the NBA’s executive vice president of global marketing partnerships, said 28 teams have casino sponsorships and 20 have lottery deals.
“As long as the gambling site doesn’t include sports gambling or sports betting, it’s now allowed within our rules,” Tatum said.
There were 148,487 Internet gaming accounts created in New Jersey through Jan. 6, according to Lisa Spengler, a spokeswoman for the state’s Division of Gaming Enforcement.
As part of the agreement, partypoker will become the official online gaming partner of the Sixers, Devils and Prudential Center in Newark, which is New Jersey’s biggest city. The agreement includes social media and digital asset creation, including on mobile devices. Partypoker will also get traditional in-arena advertising and television spots.
“These are two of the most iconic names in American hockey and basketball with huge and loyal fan bases throughout New Jersey and the surrounding metropolitan areas,” said Norbert Teufelberger, CEO of Bwin, in a statement.
Additionally, sports fans in New Jersey will be able to compete for prizes, including tickets and suites for both teams, road trips and marquee events such as the Jay Z concert at the Prudential Center on Jan. 22.
Mitchell Etess, chief executive officer of the Mohegan Tribal Gaming Authority, which owns the WNBA’s Connecticut Sun, said in a telephone interview that the Sixers and Devils are only the beginning. Mohegan Sun casino has sponsor agreements with the Boston Celtics and New York Yankees.