On May 14th, 2018, the Supreme Court struck down the Professional and Amateur Sports Protection Act, thus providing each state the decision and opportunity to legalize sports betting. This decision has revolutionized the sports gambling world, propelling the betting industry into an incredibly lucrative market space. As the rate of sports gambling continues to increase exponentially in the United States, the industry’s future remains bright. But what will the lasting impact of the wide legalization of sports betting be?
Aiming to profit from the newly legal industry, 25 states and Washington D.C. have chosen to legalize sports betting and 80% of the other states are expected to do the same in the next few years. Since then, over $20 billion in bets have been placed (ESPN). In 2020, U.S. sports betting generated one billion dollars in revenue, and that number is expected to grow sixfold by 2023 (Forbes). If betting is legalized by all 50 states, the estimated revenue would exceed $19 billion a year.
Many companies and organizations are attempting to capitalize on this rapidly expanding industry. This includes major sports leagues in the U.S. such as the MLB, NBA, and NFL. These leagues have come to understand how strong and dedicated the sports betting demographic can be and they have chosen to support that fanbase. Scott Kaufman-Ross, the NBA’s senior vice president and head of fantasy and gaming, explains the matter.
“We want to meet the fans wherever they are and so, if [betting is] how they’re choosing to engage, we want to support that,” Kaufman-Ross said. “We’ve seen the data that shows people who play fantasy sports, people who bet on sports, they are some of our most engaged fans. They consume more content than traditional fans – they watch more games and for longer periods of time.”
Partnerships between leagues, teams, and betting platforms have also exploded in popularity in recent years. The MLB’s Chicago Cubs just inked a $100 million deal with DraftKings and the NBA has secured deals with Genius Sports Group (GSG) and Sportradar. Many other organizations are following in their footsteps, with the hopes of benefitting the leagues, teams, fans, and other companies.
“The wealth of data around US sports is impressive and the customers’ appetite is massive,” Kaufman-Ross said. “That translates in fantasy-type games being hugely popular but also, from a sports betting perspective, it’s showing a higher propensity of data-driven player propositions. The leagues have made a big step towards providing real-time data to licensed league operators and that is the basis of a partnership that can be successful for both leagues and operators while delivering a better experience for the fans and customers.”
In this past Super Bowl, over 23 million Americans reported plans to bet a total of $4.3 billion (Forbes). 7.6 million of those bets were placed online, up 63% from the previous year. Due to technology’s constant accessibility, online gambling is becoming the most popular medium. An increase in gambling addictions has come with this change.
After reviewing over 140 studies and reports related to sports gambling and addiction, the National Council on Problem Gaming (NCPG) offered a statement. “Recent research suggests that gambling problems may increase as sports gambling grows explosively at the same time that mobile and online technologies evolve to create seemingly unlimited types of wagering opportunities.” Additionally, the NCPG found that sports bettors have at least two times higher rates of addiction than other gamblers, and these rates of addiction increase in an online format. This is because online gambling provides increased convenience and privacy.
Online sports betting has also made it easier for minors to get addicted to gambling. Many minors are able to illegally create accounts and begin betting from a young age. A recent study found that 75% more students are gambling now than in 2015, but many people are now working to counteract this growing movement. Moving forward, organizations such as the NCPG are working to research the dangers of gambling addictions and educate the public. Additionally, they are aiming to prohibit TV advertisements for sports betting and to enact stricter laws/regulations surrounding the topic. If the industry is able to reduce the amount of underage gambling as well as addiction, then the future will remain increasingly bright and astronomically lucrative. Sports betting truly is sweeping its way through the nation. So, with that being said, in one of the biggest games of the year, Alabama +3 or Georgia -3? You heard it here first: Roll Tide!