The five-year, $1.625 million agreement includes a $30 referral fee for every new customer CU Boulder sends to PointsBet, an Australian bookmaker with an expansive Western hub in Downtown Denver. Terms of the deal were first reported by SI.com, which obtained a copy of the contract between PointsBet and Buffalo Sports Properties LLC, CU’s private fundraising arm.
Weeks before inking the CU partnership, PointsBet announced a multi-year deal with Kroenke Sports & Entertainment (KSE), under which it became the exclusive gaming and sports betting partner of the NBA’s Denver Nuggets and the NHL’s Colorado Avalanche.
While such referral fees are common in partnerships between sports teams and gambling operators, it is unclear if KSE has received a referral fee as part of its multi-year deal with PointsBet. The partnership between CU and PointsBet is viewed as a fairly standard contract, according to a person with knowledge of the deal.
Comparison with pro deals
Since the repeal of PASPA in May 2018, more than a dozen partnerships have been struck between pro sports teams and sportsbook operators. The CU partnership, inked through a corporate sponsorship deal with Learfield IMG College, the media rights holder of University of Colorado Athletics, is unique in that it’s believed to be the first between a sports betting operator and a Division I athletic program outside of Nevada.
Over the last several months, a litany of NFL clubs have announced partnerships with prominent sportsbooks after the league relaxed longstanding restrictions on those types of deals. Over a two-day period last month, PointsBet announced separate deals with two Midwest teams – the Indianapolis Colts and Chicago Bears. In Colorado, the Broncos did not offer exclusivity to a single operator. Instead, the three-time Super Bowl champions opted to partner with several sportsbooks, reaching deals with BetMGM, FanDuel, and Betfred USA.
Under the CU deal, PointsBet will make quarterly payments to the university of $76,250 over the first year of the partnership, according to SI.com, a figure that will increase gradually over the life of the deal. CU is set to receive an annual total of $305,000 in 2021, followed by $315,000 in 2022, $325,000 in 2023, $335,000 in 2024, and a final escalator that increases the annual amount to $345,000 in 2025.
NEWS: Colorado will make a guaranteed $1.625M from its agreement with the gambling site PointsBet, per the contract obtained by @SINow.
— Ross Dellenger (@RossDellenger) October 3, 2020
Robert Davidman, a partner at Fearless Agency and an expert on sports betting sponsorships, orchestrated one of the first online gaming deals with an NFL team. Based on Davidman’s reading of the deal, CU will receive at least $325,000 per year, along with an additional incentive for bringing new customers aboard. Davidman did not read a provision in the contract on how the parties define a “new customer,” but assumes that the $30 referral fee is for someone who opens a new account and deposits money with PointsBet.
“From what I know of the NFL deals, this is definitely a reasonable deal and seems to be structured in a good way,” Davidman told CoBets.
Tapping into Boulder’s tech pool
When the two sides announced the partnership last month, PointsBet indicated that it will look to recruit CU Boulder students with considerable tech experience to join its Denver team. While PointsBet has made a commitment to hiring CU Boulder tech grads, the sportsbook operator has not disclosed the number of students it intends to hire or the starting salaries for the positions.
“As previously stated, we are a technology company first and foremost – through this relationship, our main focus is to establish a recruiting pipeline into the university’s rich pool of tech talent, complementing our growth as we look to bolster our new Denver headquarters with some of Colorado’s best and brightest,” PointsBet spokesman Patrick Eichner told CoBets.
As part of the deal, PointsBet will receive “visibility at Folsom Field and the CU Events Center through game-day promotions and advertising space,” along with placement on CU Buffs radio broadcasts and other media channels.
The CU athletic department announced a second round of layoffs in September due to the impact of the COVID-19 pandemic. CU Athletic Director Rick George anticipates that the department’s budget will fall in the range of $60-$70 million for the 2020-2021 fiscal year, according to the Denver Post, down from an average annual budget of $90 million.
In that regard, it appears that the PointsBet deal will provide a much-needed infusion of cash to CU athletics.
“It’s a very good deal for PointsBet,” Davidman said. “I am sure they will be able to capture the rabid CU fans and provide a good way for them to participate in the games with their engaging platform.”