Yahoo! Ditches Gambling-Related Ads

14 December 2000
With sagging sales revenues, Yahoo! Inc. decided to take a gamble with online bookmakers and wound up losing.

On Dec. 1, the company started placing advertisements for 30 football wagering services on its NFL Web page. Those ads were pulled today after the National Football League voiced concern over them.

Some analysts were predicting that the ads could have represented nearly $50 million in annual sales for Yahoo!, but the popular Internet portal was forced to drop the ads to keep a good relationship with the league office.

Yahoo! is one of many companies that have thrown their hats in the ring to gain the rights for development of the NFL's site.

Yahoo! currently broadcasts live audio feeds of NFL games on the Internet.

The move clearly was made to keep good relations with the NFL, but it may wind up hurting the company in the pocket book, as the company relies a great deal on ad revenue. In 1999, 90 percent of the company's $588.6 million in sales came from advertising dollars.

One analyst, Christopher Todd from Jupiter Media Metrix, Inc., a firm that has both the NFL and Yahoo! in its camp, felt the decision from Yahoo! to accept the ads didn't make much sense.

"You can't do two things like this when leagues like the NFL are so adamant against gambling," he was quoted as saying by the Bloomberg News agency.

Yahoo! Sports is a leading sports site on the Internet and is among seven other companies battling for production rights to the NFL's official website. It's also looking to extend agreements with Major League Baseball, the National Basketball Association and the National Hockey League.

According to NFL officials, although the ads had been running since Dec. 1, the league was unaware of them until late last week.

An attorney for the league admitted that Yahoo's move wouldn't give them much bargaining power in future endeavors.

"If we have a business partner who is basically ambushing us with gambling ads, they are not going to be a business partner for very long," said David Proper.

It is that attitude that has forced other leading sports sites, such as and, to not accept gambling-related advertisements.

The majority of the ads Yahoo! had accepted were from offshore bookmakers. Such companies often are willing to pay double the going ad rate to get exposure with American sites.

Online sports bookmakers collect at least $50 billion a year in bets, more than 19 times the take for Nevada sports books, said Scott Schettler, manager of Las Vegas Sports Consultants, an adviser to casinos.

The NFL has said it is happy that Yahoo! has pulled the ads from its site.