Academic Study Links Sports Betting and Higher TV Ratings
Simply looking at the way mainstream news outlets cover sporting events these days, you can assume there is a growing interest in the world of wagering. Major sites like ESPN lists games with the points spread featured as prominently as a team’s record. The talking heads of the sports world frequently reference points spreads and over/under totals when before they could only be hinted at during game broadcasts.
It certainly appears the interest in sports betting is growing and influencing sports media, but two economics professors set out to try and quantify that interest in a measurable number—TV ratings of sporting events, a number that drives billions of dollars of advertising revenue each year. Dr. Steven Salaga of Texas A & M and Dr. Scott Tainsky of University of Illinois recently released a study in the journal Economic Letters which suggests there is a link between ratings of college sports and the points spread, a key number in sports betting.
The study looks at the ratings of relatively one-sided football games and discovered that, even when the outcome of a game seemed a foregone conclusion, the ratings for the broadcast of the game didn’t just hold steady, they often spiked dramatically when the point spread winner was in doubt.
As Salaga explained to Pregame.com in an interview, “A common perception existed that the betting market played a substantial role in influencing television viewership. The issue was that nobody had formally tested this in the academic literature. Given the rise in the social acceptance of sports gambling, we thought now was the time to take a deeper look at this issue.”
The deeper look discovered that, of the Pac-10 games they examined over a period from 2005-2009, the ratings spikes and viewership correlated with the competitive points spreads, suggesting that as early as ten years ago a significant number of people were still interested in games with a seemingly inevitable Won/Loss outcome. The research project doesn’t provide conclusive evidence that the points spread caused the ratings bump, but Salaga says that was never really their intent. Knowing that you can’t draw ironclad conclusions from ratings, Salaga sees this more as the start of a larger discussion about the previously hush hush world of sports betting.
“The issue is that you don't know how many people are interested in the game because they are interested in the outcome relative to the wagering market. That is the primary contribution of this paper. We largely eliminate the potential that people are watching because it is a close game by selecting a sample of games that were not expected to be close and were also not close late in the game. Then we see how the scoring margin in reference to the spread influences viewership. That's the take-away from the paper - we know some people are watching because the lines, but how much do the lines actually influence viewership? We provide an estimate of that.”
Now that this study is out and gaining traction in the mainstream press, the question becomes what can be done with this preliminary research. While the researchers admit this is a situation where they feel comfortably claiming a correlation, but don’t have the data necessary to prove causation between betting patterns and viewership.
“I hope this work formally establishes that there is a significant relationship between the betting market and television viewership --and the estimates suggest that the relationship is sizeable,” Salaga explains. With that knowledge, he and his team hope that this will result in additional studies, and more importantly for the sports betting community, an acknowledgement by the professional sports leagues that sports betting helps keep their industry raking in money and keeping eyeballs on events.
“Generally speaking, the leagues are hesitant to come out and say this, but the wagering market clearly benefits them financially. This work shows that the betting market provides some insurance against viewership dropping too far in uncompetitive games,” says Salaga.
One commissioner Salaga did give props to was the NBA’s newly-appointed commissioner Adam Silver, who has been one of the most vocal supporters of sports wagering in professional sports.” I give Adam Silver a lot of credit for being the first North American commissioner to come out publicly and support legalized sports gambling,” he says. “Clearly, the leagues want their cut of the legal wagering market. Once they can work that out and once there is movement towards allowing the individual states to each make their own decisions on whether they will allow gambling, I think we will see real movement in that direction.”
Salaga’s hope for more legalized sports betting in the United States is starting to bear itself out in political circles. As Gaming Today recently noted, New Jersey governor Chris Christie’s push for sports betting in the state is finally gaining ground and will be ruled on in a court hearing next month, and many other states are introducing online gaming legislation that could eventually include sports betting as well.
In the meantime, this is the first step for Salaga, Tainsky, and their team, but they aren’t done. Next for them is a similar study on college basketball and NBA games. In the meantime , the hope is that this study sparks more research and generates more public, substantiated support for sports betting from academia, the media, the government, and the leagues themselves.