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A startup founder who bet his future on sports gambling before it was hot breaks down the industry’s biggest opportunities

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A startup founder who bet his future on sports gambling before it was hot breaks down the industry’s biggest opportunities

Category : entrepreneur

  • Brian Musburger started Vegas Stats and Information Network, a sports network built for gamblers, in 2017 — more than a year before a US Supreme Court decision lifted a federal ban on sports wagering and spurred more companies to get in on the action.
  • All types of US companies have jumped into sports betting since then, from media companies like Fox and Barstool Sports to fantasy gaming firms like FanDuel and leagues like the NBA and NASCAR. 
  • Musburger talked to Business Insider about where media companies are placing their bets.
  • The next big opportunity for media companies in sports gambling could be alternative broadcasts of live sports dedicated to gambling audiences, he said.
  • Media companies are also trying to educate the next generation of sports bettors.
  • But California and New York may need to legalize sports gambling for mainstream audiences — and advertisers — to start playing.
  • Click here for more BI Prime stories.

Brian Musburger went all in on sports betting before it was hot.

The former talent agent — and nephew of the sports broadcaster Brent Musburger — moved his family from Chicago to Las Vegas to start a media company dedicated to sports gamblers, the Vegas Stats and Information Network (VSIN), in January 2017.

This was more than a year before a US Supreme Court ruling lifted the federal ban on sports gambling in May 2018, allowing states to regulate wagering.

All types of US companies have jumped into sports betting since then, from decades-old media empires like Fox to controversial digital startups like Barstool Sports. Tech companies founded on fantasy sports like FanDuel and DraftKings are getting in on the action around online gambling. And sports leagues and teams from NASCAR to the NBA’s Washington Wizards are seeing where they fit in. 

“It really has just thrown gasoline on the whole thing,” Brian Musburger, who took an interest in the space after dabbling in sports betting himself, told Business Insider. “It’s opened the door for a lot of innovation and has made the mainstream more comfortable with the subject matter.”

Alternative sports broadcasts geared toward gamblers are the next frontier

Media companies are rethinking the way sports are covered now that betting is becoming mainstream.

Musburger started VSIN in part because he, as a casual sports gambler, struggled to find credible sources of gaming information. He found that much of the data available was being provided by unregulated offshore sportsbooks that had their own agendas.

The former talent agent hired journalists from the Las Vegas Review-Journal, Chicago Tribune, and other outlets to dig into the facts and focus their coverage on where people were actually placing their bets on his sports-betting network, VSIN. The startup has sports-betting channels on streaming-TV services like Sling TV and FuboTV; a satellite-radio station on SiriusXM; content on networks like the MSG Network; and video on its own website and mobile app, for which it also sells subscriptions. 

Other startups, like The Action Network — which tapped Chad Millman, the former editor in chief of ESPN’s magazine and website, to lead media — have taken similar approaches.

Barstool Bets, meanwhile, is building a team around online personalities who are bettors themselves and understand what other gamblers care about. Sports networks like ESPN are also launching talk shows, like “The Daily Wager,” geared toward gamblers.

The next phase, Musburger said, will be alternative sports broadcasts dedicated to gamblers.

Some rights owners, like the NBA and NASCAR, still aren’t comfortable having live broadcasts of their matchups inundated with gambling talk, which was taboo up until the Supreme Court decision. The leagues — and mainstream rights holders — want the games to remain family-friendly and appeal to as many fans as possible. 

“Not everybody likes to bet on sports,” Musburger said. “There is a hardcore audience that loves sports betting and is passionate about it, but the leagues can’t afford to alienate everyone else with talk about point spreads and prop bets … To keep the sports pure, you need to have an alternative stream that focuses on and facilitates that discussion.”

Musburger thinks rights owners will start considering alternative broadcasts for sports bettors as more states legalize online and mobile betting, and open the door for more people to bet in real time.

“That is an area poised for tremendous growth,” Musburger said. “You need more people to have access to in-progress wagering before there’s a ton of money flowing into that area, but it’s not far off. In the next three to four years, it will be commonplace with every league.”

Of the 18 states and Washington, DC, where sports betting has been legalized, only eight allow online and mobile sports betting today, The Action Network reported.

Some states, like Montana, require bettors to place their mobile bets inside licensed bars and restaurants. Others, like Iowa, require bettors to register in person at casinos placing bets online, which can also limit the audience for gambling.

New Jersey has a more flexible policy that could be a boon for the industry if more states adopt it. It allows people to place wagers on their phones anywhere within state lines. The state has brought in the most revenue from sports gambling of the states that legalized it since 2018, The Associated Press reported in April.

Media companies are searching for the next generation of gamblers

The audience for sports betting hasn’t changed drastically since the US Supreme Court decision, Musburger said. The avid bettors he sees visiting VSIN are still mostly men ages 21 to 65.

But legalization has started to raise the profile of sports betting among nonbettors, who are growing accustomed to seeing betting odds pop up in broadcasts on mainstream networks like Fox Sports and ESPN.

These people are new to sports wagering and still have a lot to learn. 

“It’s like with blackjack, there are basic strategies that should be used when betting on sports,” Musburger said. “A huge, huge area of growth for us is helping these people that are new to it learn those best practices.”

To this end, Barstool Sports, which recently launched Barstool Bets for sports gamblers, has started using free daily betting games to familiarize its audience of millennial sports fans with live sports betting. 

Musburger said the market for sports betting was still big without new bettors. People in the US illegally wager about $150 million per year on sports, the American Gaming Association, an industry group, estimated.

Waiting for New York and California …

The biggest shift Musburger has seen since May 2018 has been among advertisers that are paying more attention to gambling audiences.

Legalized sports betting is poised to grow from a $2.5 billion industry in 2019 to one worth $19 billion by 2023, the consulting firm Activate forecast.

More than half of that revenue, or more than $10 billion, is forecast to come from indirect gaming revenues, like advertising, sponsorships, and media and data rights.

Big advertisers, like auto, alcohol, and insurance brands, wouldn’t give a sports network focused on gambling, like VSIN, the time of day back in 2017. Today, more mainstream advertisers are taking the company’s calls.

“All of those folks ignored us in the beginning, and we’re having discussions with every one of those categories now,” Musburger said. “One of the biggest byproducts of the decision was really the comfort that advertisers were able to have with the space.”

There are still hurdles to getting mainstream advertisers involved in legal sports betting. There’s a lack of awareness that sports gambling is legal in some places. A March study by the American Gaming Association, a US gaming-industry group, recently found that big chunks of people living in states where sports gambling was legal did not know it was legal.

Sports gambling may need to become more popular on the coasts for more advertisers to take note. Musburger said some companies in the sports betting space were eager for California and New York to fully legalize sports gambling for that reason.

New York has allowed betting only in a handful of upstate casinos so far. And sports gambling is not legal in California. 

“That’ll be the next quantum leap in the industry,” Musburger said. “Once you see the two big media centers of the country go — I hate to use the phrase — all in on legalized sports betting, I really do think it will further the acceleration of the mainstream advertisers getting more involved getting more involved.”

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About Author

Sammy Singh

Global VC, Founder, and entrepreneur extraordinaire as featured in Inc. Magazine, Bloomberg, and Forbes. Sammy Singh is a graduate of UCLA and Wharton School of Business as well as a former student of Loyola University of Chicago. Sammy is best known as a renowned financial technology global entrepreneur and has founded over 26 different firms across industry and all over the world. He is a venture capitalist,a TV/ Film actor, tax specialist, and marketing solutions strategist. Connect with Sammy Singh on social media below! www.linkedin.com/in/cfo www.instagram.com/champagnegqpapi www.facebook.com/officialsammysingh www.twitter.com/cxosynergy www.medium.com/@sammysingh www.crunchbase.com/sammysingh

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