Sports Marketing Sports Betting, Daily Fantasy Sports, And College Athlete NIL Deals

Masters of Advertising Law Conference attendees: Scroll down for CLE materials

Experts discussed issues surrounding sports marketing including sports betting, daily fantasy sports, and college athlete NIL deals.

Key Takeaways

NCAA rules have prevented student-athletes from making paid endorsement deals; however, in a 2021 decision, the Supreme Court "affirmed a lower court decision holding that the National Collegiate Athletic Association (NCAA) rules limiting education-related compensation to student-athletes violated Section 1 of the Sherman Act," according to the speakers.

Because of this, the NCAA "suspended enforcement of its rule that prohibited college athletes from receiving compensation in exchange for use of their name, image, and likeness (NIL). The interim policy remains in effect until federal legislation or new NCAA rules are adopted," which states, as presented by the speakers:

  • Students may engage in NIL activities without impacting eligibility for intercollegiate athletics. If a student's school is in a state with an NIL law in effect, the activity must be consistent with the law of that state.
  • State laws and schools/conferences may impose reporting requirements.
  • NIL opportunities may not be used as a recruiting inducement.
  • NCAA prohibition on "pay for play" arrangements (e.g., compensation for athletic participation or achievement) remains in effect.
  • Students may use a professional services provider (e.g., lawyer) in connection with NIL activities, if not prohibited by state law.

Action Steps

Over 50 million U.S. adults played fantasy sports in 2021, a 13.5 percent YOY increase, according to FSGA.

According to the Unlawful Internet Gambling Enforcement Act (UIGEA), fantasy sports contests are excluded from the definition of a "bet" or "wager." This differentiates games of chance (betting or wagering) from games of skill (fantasy sports) from gambling. As such, fantasy sports operators are legally operating in the 35 states where are no restrictions or prohibitions.

Commercial sports betting revenue has reached $3.97 billion, an increase of 69.6 percent YOY; Sportsbook Operators generated $471.4 in the month of August 2022 alone, a 116.2 percent YOY. Further, the fantasy sports market is projected to be worth $48.6 billion by 2028, according to Allied Market Research.

As more states legalize fantasy sports contests, more people will be interested, and thus, an entire market opportunity will open up. The experts stated that the target demographic will range from ages 25 to 40, with social media apps being a huge platform for growth. Influencers, games, sponsorships, reward programs, and other experiences will become more popular.

CLE Materials

Source

"Sports Marketing Sports Betting, Daily Fantasy Sports, And College Athlete NIL Deals." Robert Driscoll, partner at Davis Wright Tremaine LLP; Brian Nixon, partner at Davis Wright Tremaine LLP; Alexa Nickow, senior corporate counsel at Vivid Seats. 2022 ANA Masters of Advertising Law Conference, 11/8/22.

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