What's the future for the USL and the gambling industry?

Assessing the status, risks, and potential of sports betting for USL clubs

Sports gambling is increasingly ubiquitous, and its gradual legalization across the United States will only continue. It’s impossible to watch a game without seeing an ad for a sportsbook, and leagues across the country are partnering with betting companies. For many years, any ties to the practice were frowned upon on match-fixing and legality grounds; it’s an entirely different story in 2023.

As betting gains both legality and cultural acceptance, the USL needs to approach the industry with clarity. Sports gambling will be an important source of revenue for the league in the near future, but those gains must come with a sense of responsibility.

Legalized gambling: where does the USL stand?

Among states with current USL Championship and USL League One teams, 13 have legalized sports gambling outside of casinos. Five such states do not condone gambling; three more are somewhere in-between, often allowing gambling only on casino land.

The Supreme Court cleared the way for the expansion of the industry in a 2018 decision. Under the 10th Amendment, powers not expressly given to the federal government are reserved for the states, paving the way for state-by-state regulation of gambling. Since that decision, a flood of jurisdictions have legalized betting, but that wave hasn’t necessarily led to the USL reaping many benefits.

Soccer is, in many ways, still a niche sport in much of the country, and soccer betting isn’t always accessible. This is especially true in regard to domestic leagues. United States-based sportsbooks make most of their money on the traditional “big four” sports; investing in the data and research needed to make profitable lines on the USL isn’t worth it for the low volume of betting action. Foreign - often British - books that have entered the market already offer popular European competitions.

The coverage issue becomes apparent in examining the USL’s status across the major sportsbooks in the United States.

In a sample of 10 of the largest bookmakers in the United States, only four offered bets on USL matches. The three widest-reaching services - DraftKings, BetMGM, and FanDuel - do not cover the USL. Moreover, no book covers more than eight states with a USL club.

Still, the league has dipped its toe into the industry. Twin Spires, the horse racing betting app from Louisville’s Churchill Downs, was the title sponsor for the 2021 playoffs. More recently, the USL entered into a deal with SPORTFIVE for international broadcast rights, a contract also meant to “help expand USL’s sports betting streaming and data partnerships globally.”

At a team level, sponsorships from sportsbooks have been slower to develop. BetRivers sponsored Indy Eleven as their “Official Sports Betting Partner” in a multi-year partnership in 2021 but is no longer shown on the team’s site. Betfred, a British firm, became the back-of-kit sponsor for Loudoun United this year as part of their foray into the United States. Beyond those examples, few partnerships exist.

The Las Vegas Lights list the Plaza Hotel & Casino as a corporate sponsor, Louisville City do the same with Caesars Southern Indiana, and FC Tulsa complete the trio with their Osage Casinos partnership. New Mexico United boasts Sandia Resort & Casino as the Season Presenting Partner for 2023. None of these deals extend to the statewide sportsbook level. In reviewing team websites, no League One clubs appeared to have partnerships with gambling entities.

How could the USL leverage gambling in the future?

Between the limited visibility on gambling platforms and the dearth of sponsorship deals, there’s ample room for the USL to further embrace gambling. The online betting industry is currently worth $8 billion and is projected to balloon to $14 billion by 2027; the USL’s member clubs are indeed showing interest in riding the rising tide.

Phoenix Rising are leading the way. Per an Axios report this week, the club has actively engaged with sportsbook partners to bid for a licensed gambling app in Arizona. Rising were denied a license in 2021 and narrowly missed a window to deny for a 2023 license. Still, their foray into the betting space is an example of how other USL clubs might proceed.

At the league-wide level, making USL matches available to bet on is a crucial first step. As of this February, the big three betting apps by market share - FanDuel, DraftKings, and BetMGM - combined for 83% of all sports wagers, yet none featured USL action. Caesars, the next largest book and the biggest to host USL lines, has a meager 7% market share.

Why is that visibility important? Per an expert cited in the Sports Business Journal, sports gamblers are 40 percent more likely to stream games and 36 percent more likely to buy tickets than average fans. Gambling can drive eyeballs and put people into seats, but only if gambling platforms keep the USL front-of-mind. This is where concerted action through the USL HQ can pay off, especially given the inability for clubs in many states to benefit from the growing industry.

MLS sets an example for gambling engagement. In 2019, the league inked a deal with MGM as their official betting partner. A deal with DraftKings ensued in 2022. MLS’ sheer size was enough to gain wider visibility already, but these sorts of deals assure that books do more to promote the league.

In 2022, MLS also embraced the third-party gambling data space, agreeing to a $270 million deal with IMG Arena. Per the press release, that agreement would allow IMG Arena to provide official data and analytics to MLS’s betting and media partners. Data provision is key, allowing books and their algorithms to effectively set lines and therefore cover otherwise niche leagues. The USL’s deal with SPORTFIVE may presage progress in this area.

Still, there are risks inherent to the embrace of gambling. Match-fixing is a constant concern, one that has plagued the big European leagues well into the 21st century. The high-profile suspension for Brentford’s Ivan Toney in the Premier League over gambling is evidence of the continued need for diligence.

MLS and the MLSPA have been proactive in addressing these pain points. This June, the parties established a gambling education program. The three-year project will include awareness initiatives, risk education, and ongoing prevention resources for MLSPA members. MLS also partnered with the National Council on Problem Gambling to spread awareness over gambling addiction, a laudable step given the dangers of the practice.

Currently, the USL Championship CBA prohibits any gambling on league competition, and the League One CBA does the same. Stricter, more transparent guidelines on the penalties for gambling ought to be instituted.

As connections inevitably deepen, the USL must make advocacy and safety top priorities. The league and the USLPA must proactively institute education programs and make preventative materials available, and they should likewise campaign for awareness of gambling addiction.

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As soccer and sports gambling rapidly gain in popularity, the USL is almost certain to more actively engage with the industry. Much of the league’s recent action has targeted the 2026 World Cup, based in North America, as a crucial growth stretch; this mentality has informed the promotion-relegation debate. Betting is a simpler, proven route to turning soccer fever into tangible interest and revenue.

The upside of the space is indisputable. The USL’s limited visibility on gambling apps, its lack of gambling partnerships, and eventual legalization in states like California and Texas provide ample room to grow.

However, this growth must come responsibly. Selling out to the betting industry can turn off fans, and further relationships must come with education campaigns and engagement with the USLPA. Still, embracing gambling with moderation and consideration can be a key step towards the financial surety of the USL.