Crowdfunding is a popular method of funding major projects by drawing relatively small contributions from a large number of people and entities. With today’s advancements in technology, it’s easy to mobilize the masses over the internet towards a common course. The sports industry is one of the areas where crowdfunding has made huge strides.
Gambling companies have also joined the sports sponsorship arena and are taking advantage of their massive user bases to mobilize funds towards a greater good, for instance, sponsoring a local football team or bailing out a sinking league team. For example, you can find casinos that support charitable efforts like environment conservation and team sponsorship.
There is always a huge connection between sports and gambling, and that is why casinos have never shied away from being part and parcel of the sporting fraternity. When casinos sponsor teams in multiple sports, they attract more betting on a wide range of sports other than soccer. Statistics also indicate that casinos that support multiple sports ventures attract more gaming in their online and physical casinos. But, how can entities like casinos support crowdfunding?
How Crowdfunding Works?
The secret of the success of crowdfunding lies in the masses. When a large number of people, including casino players, come together to contribute a relatively small amount of money, the funds quickly add up into something substantial that could make a difference in the sporting community. There are five different types of crowdfunding:
- Donation Crowdfunding – in this method, people give money without expecting returns.
- Reward Crowdfunding – people give contributions with a promise to receive rewards.
- Equity Crowdfunding – people contribute towards a company project in exchange for company shares.
- Debt Crowdfunding – people lend funds to a project with the hope that the project will make profits and pay back with some interest.
- Exempt Crowdfunding – this is neither debt nor equity crowdfunding. However, it has various statutory exemptions making it lie outside the securities regulation scope.
Since the global economic collapse in 2007 and the financial difficulties that followed, small businesses and sports entities faced hard times accessing funds from governments and conventional lenders. Fortunately, governments made moves to enact legislation that favor crowdfunding. Today, small businesses and sports teams are benefiting greatly from crowdfunding.
Crowdfunding is a Financial Revolution in Sports
Many financial experts believe that crowdfunding will continue to revolutionize the way sports sponsorship is executed across the globe. It’s a way of taking away the capital allocation decisions from mainstream banks and allowing the general public to make those valuable decisions. However, it doesn’t come without its fair share of challenges. In the context of professional sports, the challenges could be acute. It’s important to look at the key issues that sports teams and athletes need and figure out whether crowdfunding will be viable for them.
The Future of Crowdfunding
The success of crowdfunding lies in the proper engagement of consumers and mobilizing them around a project. Sports is undoubtedly a uniting activity, and as long as the individual contributors are persuaded by the course, they are likely to support the venture. It’s a good idea to tap into a pre-existing fan base. Fortunately, many athletes and sports teams already have a fan base. This provides a viable opportunity to turn that support into a financial mobilization effort. Eventually, every contributor will be happy to watch their favorite team or athlete perform and say, “I supported that venture.”
The sports funding arena is changing fast and getting government support is increasingly becoming difficult. However, the money is out there with the masses. One way to utilize the power of the masses is crowdfunding. Simply put, crowdfunding leverages the passion of the community towards sports. It’s always important to connect your supporters to the project goals. Which team or athlete is being supported? Why do they need the help? And, more importantly, how will the money be utilized? Crowdfunding provides a perfect platform to get answers to these questions as the final outcome of any crowdfunding venture is often clear.