In today’s Finshots, we take a look at WWE’s (World Wrestling Entertainment Inc’s) attempt to legalise betting on wrestling matches.
A few days ago CNBC broke an interesting bit of news. It said that World Wrestling Entertainment Inc. or the WWE wants the US to legalise betting on its matches.
On the face of it, it seems like a reasonable request, right?
After all, sports betting is legal in at least 36 US states at the moment. So if you want to place an outside bet on Stephen Curry winning the NBA’s Most Valuable Player this year, you could. Quite legally.
But here’s the thing. WWE isn’t really a sport now, is it?
See, if you’ve grown up watching WWE, you probably thought that all of it was real. When you were still a naive innocent child, I mean. You would’ve cheered when Steve Austin slammed his opponent into the ropes. Or when the Rock walked away with a WrestleMania title. Little did you know back then that these matches weren’t exactly spontaneous. That it was scripted and that the storylines and narratives were weaved in. WWE’s ‘creative’ team had already decided the moves the wrestlers would perform. And the twists and turns were all whispered into the ears of the wrestlers before the match.
WWE is not a sport. It is just entertainment. Scripted, just like a movie.
Now imagine allowing people to bet on such games where the outcomes are known well in advance. It wouldn’t be quite fair, no? Shrewd bettors could get insider access and make boatloads of money.
But the WWE has its own rationale. They’re basically saying, “Look, you’ve allowed people in some states to bet on the Oscars. People could’ve placed their bets on Naatu Naatu winning the award. Even though the result was known beforehand to a select group of people. Think of the WWE as something similar.”
And to ensure that everything remains a top secret, the word is that WWE even said it’ll work with audit firm EY. Make sure everything is clean as a whistle. After all, folks like EY and PwC have a history of working with award ceremonies and keeping results hush-hush.
This brings us to the question — why does the WWE want to legalise betting so badly?
Well, it’s the money. Duh!
Just look at how sports betting has shaped up in the past 5 years. Ever since it was made legal, billions of dollars have been bet across the top 4 sports leagues in the US — basketball, American football, baseball and ice hockey. $180 billion worth of legal bets in fact. And the bookies who facilitate these bets have raked in nearly $14 billion in revenues too.
It’s no wonder that in 2018 the NBA actually told these bookies — apps, websites — that it wanted a 1% cut off every legal bet made on its games. After all, the NBA games were drumming up business for them. And it wanted a nice meaty share of it too. Even the players would get richer since half of this income would go to them.
And when betting is made legal, leagues could see more TV viewership too. It won’t be just the loyal fans who’re tuning in. But even those who’re trying to make their fortunes by placing a bet will be glued to the games. And advertisers love those eyeballs. Whether it’s sponsorship on the courts or streaming, the ad revenues for leagues shoot up. In fact, the NFL (American Football) actually made a record $1.8 billion in sponsorships in 2021 all thanks to sports betting companies joining the fray.
All that extra interest might also sell more tickets. People might buy more league and team merchandise. Everything. It’s a real money spinner. And while we don’t know how the eventual numbers turned out, Nielson Sports had run the numbers and estimated that leagues could make over $4 billion each year through all these extra sources of revenue. Just by legalising sports betting that is.
So you can be sure that the WWE was lured by all these fancy numbers and they want a piece of the pie too.
But why now?
Well, the rumour is that WWE is looking for a buyer. It wants a $9 billion valuation. And if you dangle this new lucrative revenue stream in front of a suitor, it could bump up its valuation a bit more. The deal will look more enticing. And don’t forget that the WWE doesn’t actually have an off-season. It goes on every week, through the year. It’s quite unlike other sports leagues where the players take a rest. Oh, and the result of this is that WWE can consistently churn out content for social media — it’s the only sports league that has crossed 20 million followers on TikTok. There are a lot of eyeballs watching this ‘sport’. And more eyeballs translate into more potential bettors. Imagine how much additional betting revenue this can bring.
Anyway, we don’t know if this will work out for the WWE. It does seem like a long shot at the moment. States seem to be iffy about allowing betting on scripted events. That’s why betting on the Oscars legally is limited only to a handful of states even now.
The only thing that could sway it — the allure of money!
Between 2018 and 2021, states raked over $700 million of tax revenue thanks to legalised sports betting. And this fledgling industry has added over 200,000 jobs. The big picture is that all this activity is expected to bump up the GDP significantly too.
But will it be enough to convince regulators to open a scripted ‘sport’ to the betting industry? WWE will surely be hoping so.
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