Prior to the 2018 Supreme Court ruling that lifted a federal ban on sports betting outside of Nevada, the marketplace for sports betting was murky at best. While in-person sportsbooks in Vegas ruled the sports betting sector in the US, offshore sites encroached to get the leg up on the legal competition.
Since the 2018 ruling, a total of 18 states have opted to regulate sports betting in some form or another. Another 4, including North Carolina, Tennessee, Virginia, and Washington, recently passed bills allowing sports betting to begin.
Some states, like New Jersey, leaped into physical sportsbooks as well as online gaming opportunities. Others, like Delaware, have created a long list of rules related to betting on sports, which have led to a small but easy-to-regulate sector.
Regardless of a state’s interpretation and regulation of sports betting, it’s clearly a lucrative endeavor. Since legalizing sports betting, states have raked in hundreds of millions in tax dollars. New Jersey tops the list of newcomers, regularly taking home more than $10 million per month.
Much like the legalization of recreational marijuana in states like Colorado, this additional revenue has led to each state’s ability to improve public services, like healthcare and infrastructure. In some states, like Tennessee, a whopping 20% of revenue from sports betting goes directly to state coffers.
Beyond the tax benefits for governing bodies, the industry is set to revolutionize sportsbooks as a business across the country. Of the some $20 billion wagered since the 2018 Supreme Court ruling, most has gone to sportsbooks—not taxes.
The Move Online
At the moment, the betting boom in the US means that existing casinos are looking to adapt their sportsbooks to online platforms. Meanwhile, successful global brands are looking to jump overseas to make it big in the states.
Though in-person betting lounges are popping up in stadiums like Vegas’s new Allegiant Stadium for the NFL’s Raiders franchise, the majority are entering the market online. Though sports fans are likely rejoicing, it pays to do some research before wagering online.
Fans looking to bet need to wade through countless offers before finding a reputable site that offers a wide range of wagers and risk-free bets and risk-free bets for major league sports. This is a major consideration for the industry as a whole, given 84% of New Jersey’s $4.6 billion in revenue in 2019 came from the online sector alone.
One major sector within the online sports betting industry belongs to fantasy leagues. While Yahoo and ESPN have offered their own popular and successful fantasy leagues for two decades, the emergence of daily fantasy providers (DFS) that offer real money action has also thrown an interesting curveball into the world of sports betting.
Based on real player and team performances in live leagues, fantasy leagues are likely to adapt with more than one spinoff as the online sports betting market evolves organically as part of the US sports sphere.
Despite being a high-risk merchant in some cases, online betting sites have staying power in the US. In fact, a recent study conducted by Bank of America estimates that up to 50% of Americans may be betting by 2022 and the industry may be worth somewhere in the range of $6 to $20 billion.
Looking forward, technology will play a crucial role in the growth of online sportsbooks. At the moment, stadiums (like the aforementioned Allegiant Stadium) and franchises within leagues like the NFL, MLB, NHL, and NBA will likely partner with sportsbooks to provide high-speed service inside stadiums to allow fans to engage in live betting.
Sports leagues will be involved to ensure the integrity of the sport; stadiums will partner with service providers to make a mobile betting experience seamless, and franchises may even be sponsored by sportsbooks someday.
From a business point of view, the possibilities are endless given that this is a young marketplace expected to boom in the coming years. In addition to traditional sports betting (in-person and online), the rise of esports betting will continue to develop as a separate industry alongside real sports.
In fact, some leagues, like the NBA, have already jumped on board. Franchises like the Golden State Warriors and individual players like Michael Jordan are investing in esports teams at the moment in anticipation of a massive rise in esports competitions, teams, and, eventually, betting.
At the moment, non-sports simulation games are some of the most popular games being bet on in structured competitions. This includes first-person shooters like Call of Duty, battle royale games like League of Legends, and fighting games like Street Fighter.
However, unlike major league sports, the esports betting arena is likely to be (at least temporarily) swiped from the sports betting sphere. The sector slides into a murky area of the law.
Issues that involve the competitors, such as fair contracts and age requirements, and governing bodies, like the four-year-old World Esports Association (WESA), still need to be fleshed out and standardized across leagues and competitions.