Supreme Court Ruling May Give Beer a Bump
On Monday, the Supreme Court struck down a 1992 law that banned sports betting , opening the door to an estimated $150 billion in legal gambling. How big is that? By comparison, the entire US beer market is worth just $111 billion. And beer will almost certainly get some kind of a bump because of the ruling.
This is because 1) gambling increases fan engagement and 2) fans drink when they watch sports. This is not a marginal effect:
"Gambling is a huge, huge fan engagement tool," said Andrew Brandt, director of sports law at Villanova University. He quoted Nielsen research which estimates that the average NFL fan who is a non-bettor watches about 15-16 games a year. The average NFL fan who is a bettor watches 45-50 games a year.
Tripling the number of games a fan watches is dramatic, but I was even more amazed by this next stat. Most people drink alcohol when they watch sports.
American football is the premier U.S. sport for drinking with 84 percent consuming alcohol while watching it on television and 83 percent enjoying it at the stadium. Even though it's less common to order a beer at a tennis game, many people do it anyway. 75 percent of U.S. adults say they prefer to drink alcohol during a live tennis game while 76 percent quench their thirst for beer watching a live round of golf.
Click to enlarge.
You're thinking, "Wait, more people drink when watching football than golf?--what else could make golf interesting but booze?" Your logic is sound, but there it is. In fact, no fewer than two-thirds of television viewers of any sport drink while watching, and for all the big sports that figure is above 80%.
So to recap. Being able to gamble on sports increases engagement profoundly--tripling in the case of America's most popular sport--and people watching sports on TV overwhelming do it with alcohol in their hand.
“Just as important, as we see from international jurisdictions and from what we know already goes on in the United States, regulated betting can lead to a dramatic increase in engagement.”
After the ruling came out, many noted how it would almost certainly boost the fortunes of sports leagues and TV networks. So far that I've seen, no one has calculated how it will affect beer sales, but it seems all but a sure bet that they'll get at least a marginal bump. It would take only a 1-2% increase to stop the industry's perpetual shrinking, and could even send it into a growth cycle. Producers of industrial light lager are likely to see the lion's share of the benefit, but craft breweries--particularly those making lower-priced beer in bulk packages--should see growth, too.