February 7 marks the biggest day on the National Football League (NFL) calendar as Super Bowl comes to Bay Area, San Francisco, California. It’s the finals of the NFL, and it determines the ultimate winners of the league. The Super Bowl has been for years sports’ largest weekend event in terms of audience and revenue generated. It is an annual event, which makes it somewhat a little bit more popular than FIFA World Cup, especially in the U.S.
Last year, Super Bowl 49 weekend grossed more than $14 billion in consumer spending, adding to the figure reported in 2014 by nearly $2 billion. From a consumer perspective, the Super Bowl weekend is usually characterized by major advertising events, with some companies spending millions of dollars to get their ads featured during the match.
There are also other retail-focused events, including selling drinks and snacks to the audience, which add to the above figure of $14 billion. Since 2011, each of the Super Bowl weekends has managed to gross at least $10 billion. The Super Bowl weekend has also managed to a significant increment every year since 2010, apart from 2014, when consumer spending increased by just $90 million from the previous year’s figure.
From a consumer spending standpoint, it is very easy to aggregate the amount spent during the Super Bowl. However, when assessing the other major revenue stream of the event, whose collectibles depend on the amount wagered via various betting houses, the picture is never clear.
Statistics indicate that Las Vegas-based sportsbooks have barely managed to record incomes in excess of $100 million during a Super Bowl event. The last two Super Bowl events were a lot more successful, though, netting $119.4 million and nearly $116 million for Super Bowl 48 and Super Bowl 49, respectively.
However, according to several reports, a majority of the wagers during the Super Bowl are done underground thereby leading to low sportsbook revenue for the event. The underground betting is primarily due to the fragile regulation imposed on online gambling in the U.S.
Companies are restricted to conduct gambling businesses in several states in the U.S. with only a few such as Nevada, Montana, Delaware, and Oregon allowing companies to run Sportsbooks businesses. However, only Nevada has sportsbooks large enough to get the attention of off-state gamblers. This means that if you want to gamble on the Super Bowl event, you have to get to Las Vegas.
According to an article published on Forbes online magazine last year, the total amount wagered during a Super Bowl event exceeds $8 billion. However, the realizable value for each of the last 12 Super Bowl events is only a fraction of what is actually wagered. So, where does the rest of the Super Bowl betting money go? It disappears in the world of underground betting.
While companies are prevented from conducting online betting business in several U.S. states, people do not have that type of restriction. Super Bowl bettors are free to place their wagers with offshore companies registered in the U.K., Malta, Virgin Highlands, or Gibraltar, among other locations.
This means that at the end of the day, a majority of the money wagered during the Super Bowl flies out to foreign countries instead of adding to America’s GDP. As such, Super Bowl 50 will witness a massive amount of money wagered, but only a fraction will be presented in the books of local sportsbooks companies. This is all because there is a rule that was created in the belief that legalizing sports betting and online gambling in the U.S. could compromise sporting activities. Issues like match fixing are among the crimes that are believed to have been kept at bay from the Super Bowl and other sporting activities by such rules.
However, common sense implies that given the fact that underground betting is still a major activity in the U.S., then the current rules do not really prevent crimes like match fixing from happening during the Super Bowl. If people wanted to fix NFL matches, including the Super Bowl, in order to benefit by placing bets, then they could do that via the underground betting networks.
As such, there will be a lot of money made during the Super Bowl 50 event, but a majority of it will be going to the underground betting networks.
[Photo by Frederick M. Brown/Getty Images]