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Why You Should Ignore the Sports Betting Hype at This Year’s Super Bowl


sports betting - Why You Should Ignore the Sports Betting Hype at This Year’s Super Bowl

Source: shutterstock.com/Sergey Nivens

Rob Gronkowski is one of the biggest names in football. Only one season removed from his playing career, Gronkowski has built a reputation as one of the most formidable tight ends in the history of the sport, thanks in no small part to teammate Tom Brady. In the last several years, Gronkowski has also become one of the most prominent product spokesmen, and this weekend he’ll be kicking a field goal at the Super Bowl halftime

Most importantly, there’s $10 million on the line for FanDuel users.

The deal Gronkowski struck with FanDuel has ensured that he will keep his pockets lined long after the NFL dollars have stopped flowing. FanDuel is paying out up to $10 million on free bets new customers can make on the success of the kick when they sign up for the service. Fun for viewers and lucrative for Gronkowski, for sportsbooks, the ad is jumping the shark. 

It’s a commercial with one of the biggest faces of football. And because it will be a live broadcast during the ad spot, users who signed up for the free bet will be glued to the television. It’s one of the most genius bits of Super Bowl marketing in recent memory, and for a game that many watch explicitly for the commercials, that’s saying something.

Not everyone is on board — sports betting has a dark side to it. It’s riddled by addiction, legal gray areas, and even conspiracy theories around the sports these sportsbooks profit from. But with over 50 million people expected to bet a whopping $16 billion on the Super Bowl, these companies are basking in the spotlight. Indeed, the NFL and sports betting companies are getting cozier than ever

But don’t get caught up in sports betting too quickly.

Just last year, the notorious “Crypto Bowl” thrust four different cryptocurrency ads in front of the masses, and Gronkowski played his role as a product spokesman then too. 

You see, crypto and sports betting rely on many of the same psychological tactics. In fact, both industries prey on the same type of investors. In the wake of the crypto crash and amidst the mainstream rise in sports betting, it’s time to pay close attention to this dynamic. 

Targeting Masculinity, One Ad at a Time 

Perhaps unsurprisingly, sports betting and crypto investing both primarily target younger men. 

“The prototype sports bettor is male, young, tech-savvy, and professional, which aligns with the target audience of betting advertising,” Dr. Mark Griffiths detailed. Taking things a step further, Griffiths describes the psychological makeup of the prototypical sports bettor as focusing greatly on masculinity. 

“This reinforces the idea of male providers that sublimates in gambling their manly instincts for aggression, competition, and combat, as was observed in the [behavior] of horserace bettors as identified in early studies,” Griffiths wrote. 

Researchers have drawn many conclusions about the cognitive biases present in the minds of crypto investors as well. Crypto investors tend to stumble into these four traps

  1. Illusion of control: An overestimation of one’s ability to control events. 
  2. Self-serving attributions: Attributing the outcomes of one’s investments to personal action or cunning, rather than to external factors.
  3. Hindsight bias: The perception that a given outcome was hypothesized the entire time. 
  4. Hot-hand fallacy: The idea that a bettor perceived predictable momentum shifts while experiencing multiple successes in a row. 

These biases are present in the minds of many sports bettors. The hot-hand fallacy is especially pertinent, seeing that the name of the bias is derived from gambling culture. Just as a bettor who wins a few times in a row might perceive growing momentum in their favor, so too do crypto investors perceive a momentum shift with multiple successful trades. However, this lends itself to “flying too close to the sun” and losing everything.

Super Bowl Advertisers Are Exploiting These Fallacies 

We now know how crypto fans and sports bettors think. As Griffiths highlights, advertisers know — and leverage — this information too. 

There are three major messages that sportsbooks emphasize in their advertisements. Betting is a perfectly normal activity, errors in betting predictions are not fatal, and betting is a social activity.

Although there have been just four Super Bowl crypto commercials thus far, it’s still incredibly easy to draw parallels. Larry David’s iconic FTX advertisement leaned into the “normal activity” message. The commercial paints David as the odd one out for not adopting the “perfectly normal” technologies we use today, including the FTX exchange. The use of FOMO, or “fear of missing out,” in the ad comes from the idea that you’re not participating in a normal activity and should be.

Coinbase’s (NASDAQ:COIN) bouncing QR code ad utilizes the “non-fatal” message, giving viewers a free $15 in Bitcoin (BTC-USD). If BTC-USD loses value, the viewer doesn’t lose anything, really, since it was free. And now, they’re signed up for the exchange and connected to thousands of opportunities to win. It’s a tactic not unlike FanDuel’s “free bet” on Gronkowski’s field goal kick. eToro’s advertisement played into the social messaging, showing new users floating off to join the flock of others investing with the app.

These advertising messages loop back to the logical biases of consumers in many clever ways. The Coinbase ad, for example, exploits the “hot-hand” fallacy, giving consumers a free investment in a cryptocurrency far more likely than any other to rise in price. All the company needed to do was get new customers signed up. The promise of rewards would take things from there. FTX’s FOMO ad taps into hindsight bias by showing a Larry David character who lacks hindsight, making him look silly.

Why Gronkowski’s Super Bowl Ad Matters

There’s another popular tactic both industries employ to lure new customers. Think back once again to Mr. Gronkowski. 

Gronkowski’s distinct personality has made him an apt face for many commercials over the years. Recently, he has seemed to find his stride as a celebrity with his finger on the pulse of the up-and-coming. In 2020, he waxed about the medicinal uses of cannabis. The NFL player touted “proof” of cannabis use for physical recovery and athletic performance. 

He and other celebrity endorsers helped drive investors to the cannabis space in 2019 and 2020. “Green” investments saw a speculative boom prior to meme stocks, crypto, and now, sports betting. This boom happened despite the fact that Gronkowksi’s claims are still years from being proven by researchers.

Then, in 2021, athletes entrenched themselves in the world of crypto advertising, including in the Super Bowl. Jacksonville Jaguars quarterback Trevor Lawrence is the face of Blockfolio. NBA star Steph Curry and Gronkowski’s teammate Tom Brady were spokesmen of the ill-fated FTX. Gronkowski, just before his plunge into sports betting, became a partner of the now-bankrupt Voyager Digital

The idea of the athletic “American heroes” who defied the odds have helped Gronkowski effortlessly take on the job of normalizing these products and services among the appropriate demographic. It helps that he already has a strong rapport with a sports-watching, young, male audience. He lived a relatively normal childhood in upstate New York and built a professional football career by working hard. It’s a relatable story; fans feel that by working hard, they can be successful, rich, and famous like Gronkowski. And if Gronkowski says he uses a product to be a better athlete, or uses FanDuel to make money on the side, there are viewers who will pick up those products (or apps) to mirror his journey. As Griffiths puts it:

Celebrities deepen that connection as they have been proven to reduce the perceived risk by the public of the products they endorse. Sportspeople tell the story of young, talented risk-takers who challenged the odds but emerged successful in the end, arguably a perfect incarnation of the bettor’s own aspirational narrative.”

With cannabis, Gronkowski’s familiar face and aspirational story helped NFL viewers get past safety concerns. With sports betting — and with crypto — Gronkowski and his peers have also helped tell the story that taking a gamble is a safe and easy way to strike it rich. 

Do these athletes believe in the products they are pushing? Maybe. But there’s clearly a linear trajectory for celebrity endorsers from industry to industry. In 2020, it was cannabis, just as the industry started to boom on Wall Street. Last year, crypto was all the rage as it surged above $3 trillion in market capitalization. At the time, it seemed like the good times would never end. 

It’s not surprising now then that as more states legalize sports betting that celebrity endorsers are flocking to their next round of big checks.

Beyond Commercials: Blurring the Lines Between Crypto and Sports Betting

It’s one thing to look at ads and draw similarities between cryptocurrency and sports gambling. However, these industries are further intertwined, embracing the concept of “money as a ‘hobby.’” 

The prevalence of crypto-based sports betting sites provides sufficient evidence of this. Digital parlors where one can place sports bets using cryptocurrency have existed for years. Most often, they exist offshore. The first sports betting site built specifically on crypto, Cloudbet, launched as early as 2013. Before the Supreme Court’s 2018 decision to allow state-controlled sports betting with Murphy v. National Collegiate Athletic Association brought legal betting to mobile phones across the country, these crypto sportsbooks were the easiest and quickest way to bet on sports. Now, this industry intersection is becoming more entrenched. 

In Wyoming, lawmakers have accommodated crypto sportsbooks in legislation. Members of the notoriously pro-crypto state’s House of Representatives passed a bill in April 2021 which not only legalized sports betting, but also explicitly legalized the ability to gamble with crypto.

Sportsbooks themselves have taken the blockchain market’s popularity and run with it. DraftKings (NASDAQ:DKNG) recently opened up an NFT marketplace to capitalize on the popularity of sports memorabilia. Touting convenience, it allows buyers to purchase NFTs with fiat currencies, something unusual in the DeFi space.

Similarly, crypto projects have used sports’ perpetual popularity to their own advantage. 

Socios.com and its Chiliz (CHZ-USD) token represent the best example of this. The project has paired with dozens of professional sports teams around the world, luring customers with promises of discounted tickets and greater involvement in their favorite teams. For teams, there are incentives to partner with betting and crypto firms because they have been proven to increase audience engagement.

So What?

Why does all of this matter? Who cares if some people want to invest in crypto or bet on their favorite sports team? 

The way advertisers frame these products and investment opportunities leans on predatory. And, as Gronkowski’s own personal advertising career proves, it’s one big cycle. Acknowledging that there will always be the “next big thing” stealing the show in Super Bowl commercials can hep investors keep their portfolios — and their wallets — safe. 

Gronkowski has taken a check year after year from the latest “get rich quick” schemes. He has told consumers that CBD will make them better athletes. He has told them that crypto is the fastest way to achieve prosperity. Now, he’s telling them to place a free bet on his kicking ability for a shot at a life-changing amount of money. He’s just one of dozens of athletes and other celebrities doing the exact same thing year in and year out.

And of course, there’s nothing absolutely wrong with these products. Placing a bet on the Super Bowl is fun, and it can win you a lot of money. Crypto is wildly similar, and Bitcoin investments blossom in bull markets. Yet, the way advertisers tend to frame promotions makes “winning” seem more frequent. And, they prey on a very specific type of demographic, one highly prone to addiction

When you’re watching the Super Bowl on Sunday, pay special attention to the way sportsbooks are framing their services. You’re highly likely to find celebrities “just like you” providing a low-stakes bet that can “make you rich quick.” Many of the same cognitive biases that FTX and other crypto companies presented last year will be visible. Armed with this knowledge, maybe you’ll think twice about whether a hot industry is actually providing customers what they promise. 

On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2023/02/why-you-should-ignore-the-sports-betting-hype-at-this-years-super-bowl/.

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