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Q&A – Nielsen sports betting report reveals interesting findings

Nielsen Sport SA, in partnership with Cash N Sport, recently released an interesting report into the South African sports betting industry, and here Managing Director Jean Willers answers questions on some of the key findings of the report.

Q: Why is this report important?
A:
Globally, we have seen the significant impact sports betting brands have made through investment in sponsorship as a marketing tool. In this report we conduct a deep dive into the local industry that generates R10.6 billion in gross gaming revenue, accounting for 55% of the South African gambling market. This report is an overview of the South African sports betting industry, its history, the legislation supporting it, how it has evolved over the past 26 years, and who the main brands involved are.

Q: Who will be interested in its contents and why?
A:
This report is for the rights-holders, agencies, broadcasters, brands, and individuals trying to understand the betting industry. Without this understanding, no informed decision can be made.

Q: Does your research suggest the South African gambling/betting industry is mature?
A:
The gambling and legal and illegal betting industry has been around for many years. Only in the past couple of years have we seen a massive surge in the sports betting industry, overtaking the gambling industry in terms of gross revenue. 

Q: Do you have any thoughts on the SA horse racing industry, from a commercial point of view, as detailed in the report?
A:
This industry has been under massive pressure over the last couple of years during the pandemic, and according to the National Horseracing Authority’s national report, the industry was under pressure for many years prior to the pandemic. However, it is exciting to see the developments taking place with new owners of the Phumelela business in 4Racing. Their ‘new’ revamp channel on DStv called ‘Racing 240’ has been continuously growing in viewership numbers and interest. In related news, 4Racing’s competitor, Gold Circle, based in KZN, recently announced a new naming rights sponsorship with Hollywoodbets for the Durban July. 

Q. With brands such as Betway and Hollywoodbets becoming increasingly more active in the South African sponsorship space, would you say that the betting industry has become a major player in the local sponsorship space?
A:
The betting brands are definitely major players in the sponsorship space. The sports betting industry has grown in South Africa, meaning more people are placing bets and looking for platforms to place bets. Due to this growth, we have seen a number of new international brands launching their products in South Africa. Using sponsorship as a powerful marketing tool for these brands is important for them to gain awareness amongst their users – sponsorship definitely creates this awareness for them.

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Q: Any idea regarding why this is only a more recent development in the last couple of years?
A: The growing youth market, smartphone penetration, online vs physical store, and digital payment solutions are all topics we explore in detail in the report. We unpack in great detail the reasons for the growth in sports betting and why we feel it has happened. Sports betting has evolved from physically going into a betting shop and placing a bet to doing everything on your mobile phone. This has given more people access to the platforms and more people are able to place bets.

Q: There have been some interesting developments in Europe, with regard to the legislation of betting brands and sponsorship. Your thoughts on that?
A:
We have seen a ban imposed on betting brands’ sponsorship of football clubs in Spain and Italy and now more recently massive pressure is being placed on English Premier League clubs to end their relationship with betting brands. Over-stimulation and exposure to these brands and products are one of the key reasons for this clampdown. Many clubs are set to lose millions of pounds in revenue and have to act quickly to ensure they replace these betting brand sponsorships. This is leading to opportunities for other brands like Cazoo and cinch, who are jumping in and signing on a lot of new sponsorship at potentially lower prices. However, sports betting globally still has massive growth potential with only a few states in the US legalizing sports betting. America still has a number of years of growth for betting brands, and with the wonderful international sporting calendar that they are looking at over the next 10 years, I predict massive growth in this market.

Q: Do you feel South Africa could follow suit and if so, how would that impact the local sponsorship industry?
A:
Rights-holders locally and around the world need sponsorship funding as a key part of their revenue plan. We have seen certain brand sponsorships move in cycles from tobacco brands to beer and wine and now the betting brands. All of these industries have used sponsorship, and specifically sports sponsorship, to reach passionate fans and advertise their products and services to them. The question that has to be asked in South Africa is: have our football clubs missed out on the potential sponsorship revenue they could have received, if it was allowed by the PSL? Betting brand sponsorship will definitely come under pressure from rules, regulations, and potentially even laws in the future. I don’t know when and how, but I do know that rights-holders have to use the opportunity in this window to receive the funds available from these betting brands.

Q: There is some interesting data on multi-screen viewing in the report. What is this saying about local sports consumption?
A:
The way in which we consume content has changed forever, and we now have access to multiple devices, apps, and content platforms at the same time. Our consumption habits and the way in which we engage and connect with our communities have changed forever. 47% of global fans who watch sport on TV or digital platforms simultaneously watch other live content, whilst locally we follow a similar trend. From our local research, as included in this report, the 16 to 30-year-old community makes use of multiple apps, devices, and activities while consuming live sport.

Q: What does the future hold for the South African sports betting industry, in your opinion?
A:
The short-term is very exciting. Fans have become ‘digital natives’ – multi-screen and multi-platform users – and we are even online grocery shoppers. The betting brands are perfectly positioned to capitalize on this market and I suspect we will see a few more betting brands launch in South Africa, especially given the rules and laws being passed in the UK and Europe. Our rights-holders have to capitalize on this source of sponsorship revenue and they have to look after their relationships with these betting brands, as they might not be around in 10 years’ time.

Sport Industry Group
Sport Industry Group

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