Betting Licenses Turn Into ‘Game Changer’ for WNBA Balance Sheets

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The Phoenix Mercury are reaping the benefits of their 15-year agreement with Bally’s Corp, a deal which is already paying dividends. The wide-ranging partnership, reportedly worth about $66 million, provides revenue that Mercury president Vince Kozar calls transformative.

“This is an opportunity for us to invest in our business in a way we haven’t been able to in a long time,” Kozar said.

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Already, the Mercury have expanded their advertising budget for season tickets, and have a new team-focused docuseries coming out soon thanks from revenue generated from the sponsorship gaming deal.

The WNBA as a whole is generating more interest than ever and expects to set new viewership milestones this coming season. But the quickest route to prosperity for some franchises lies not in future media rights deals but in lucrative market access agreements with sportsbook operators.

The Mercury’s largest sponsorship deal in team history was made possible last year after the Arizona legislature passed a sports betting bill, which allows local pro teams to acquire mobile sportsbook licenses. While the Phoenix deal is the most public and active, a host of WNBA teams have already been in contact with potential betting partners. And others, including the Atlanta Dream, are pushing for team-friendly language in yet-to-be-passed sports betting bills in hopes of capitalizing on similar benefits.

“It would be a massive game changer for us,” Dream president Morgan Shaw Parker said.

Sports betting has been approved in 30 states, some of which are granting teams the authority to acquire limited licenses and sell them to eager operators looking to gain access to newly opened gambling markets. While the market access deals are great financial opportunities for the already valuable men’s major league franchises, the deals create an even more meaningful windfall for WNBA teams.

Bettor Capitol CEO David VanEgmond, who has worked on related deals, says the licenses could be viewed as a commodity. The former FanDuel dealmaker says while the NBA Phoenix Suns sponsorship assets sell at a higher price than those of the Mercury, its license theoretically provides the same economic value as the WNBA club.

“In a free market those should be identical,” VanEgmond said of both teams, which are owned by Western Alliance Bancorporation chairman Robert Sarver. “And obviously that’s more impactful for the Mercury than it is for the Suns.”

It’s unlikely the new stream for certain teams could immediately reverse the league’s stance on chartered flights or directly help in acquiring elite players, since the salary cap remains in place.

But execs around the league believe the extra flow of cash could do wonders in terms of elevating player recruitment and accommodations, including team-issued cars and complimentary housing.

More money could also lead to a WNBA arms race in player facilities, with franchises pressured to offer quality performance and rehab centers, for instance, or lose out on top free agents.

More than that, the guaranteed millions could drive up team valuations, potentially making WNBA teams far more desirable for prospective owners, as has happened recently with MLS.

Houston Dynamo FC recently signed a deal with Fubo Gaming worth $178 million, one of the largest commercial deals in MLS history—and that’s in a state where gambling is still illegal. The partnership, which includes a signing bonus and pre-legalization revenue, gives a glimpse of how attractive the potential Texas betting market is to operators.

But passing necessary legislation isn’t easy. Texas sports betting legislation failed to advance last year, while Georgia’s legislation stalled earlier this month. There are also many nuances, including size of the state, casinos, lotteries and the role of Indian tribes. Some states like New York have taken control over licenses entirely and charge high tax rates to operators.

Even if lawmakers do allow sports entities to acquire licenses, it’s not certain that WNBA teams will be included in the consortiums of local pro teams, which has been a point of contention for some like the league’s reigning champion, Chicago Sky.

The WNBA, half-owned by the NBA, has made strides in sponsorship deals with reputable companies like Nike and recently completed its largest funding round ever. Sports economist and professor David Berri agrees that passive revenue licenses for teams are a short-term win but believes these long-term deals with operators may actually be counter-productive.

“They may say that’s it’s a great deal now, but in 15 years, you may think it’s a crappy deal,” he said. “You’ve got to envision what your product is going to be in 10 years.”

WNBA commissioner Cathy Engelbert hasn’t been shy about saying sports betting and gaming will help take the league to new heights. League-wide sports betting partnerships are expected to be a new way to appeal to more fans and likely will coincide with future media deals.

But in the meantime, teams are working with lobbyists in state capitals, doing their best not to fall behind WNBA clubs already cashing sports betting checks or those led by ownership with built-in NBA infrastructure like the Indiana Fever, New York Liberty, Minnesota Lynx and Mercury.

“We’re the first, but we certainly want others to join us,” Kozar said. “We won’t be the last.”

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