Legal sports betting in the United States has finally expanded beyond the state of Nevada. In 2018, the federally implemented barriers to growth finally came down, and the industry has exploded as a number of other states have followed suit. Next to enter the sports betting arena could be California, where a vote is being held in 2022. Needless to say, the Golden State has the potential to become the biggest state player in the market. Meanwhile, New Jersey has managed to surpass Nevada as the biggest spender in sports gambling.
In 2020, internet sports betting boomed in the United States, despite reduced seasons, canceled tournaments and poor sports viewing ratings. Sports bets placed, or 'the handle’, as the industry calls that sum, increased by 39% year over year, from around $13bn in 2019 to $18bn in 2019, according to data from Legal Sports Report. A variety of forms of sports betting is currently permitted in 21 states and DC, but internet betting has accounted for the majority of the continuous market development.
It appears that the market has grown due to its convenience and powerful entertainment value. New Jersey has seen its online handle jump to $15bn since legalizing online sports betting in mid-2018, with half of that taking place in 2020. And 90% of all bets in the state are now placed online. Sports betting businesses have earned roughly $1bn in income, resulting in a $115m tax windfall for New Jersey, based on its handle. New Jersey now matches Nevada, the home – of course – of Las Vegas, in terms of overall betting volume.
Legalized online sports betting gives bookmakers and leagues the chance to not only provide thrilling interactive online experiences but also to profit from a highly efficient fan demand curve, and establish new revenue streams. For example, a die-hard Green Bay Packers fan who resides in, say, New Jersey, and would otherwise purchase a season ticket, might redirect that money to an online sports betting operators. And the ease with which you can place your sports bets at Betfred, for example, is truly impressive.
Is now the right time to invest, though? Since the Supreme Court ruled with New Jersey in its challenge to Nevada's monopoly on sports betting in 2018, Americans have gambled more than $65bn on sports. The 2021 NFL season was expected to pull in around 45 million American bettors. So, from that perspective, it certainly seems the American public are backing the industry.
Watching sports on TV and gambling on sports were long considered two very distinct pastimes, but the obvious connection between betting and the actual sports themselves has led to a rapid intermingling and the big industry players are rapidly getting involved. America’s palaces of gambling – the casinos – are under threat from the rise of mobile betting apps. With an app, there’s no need for a tuxedo and a team of tough-looking bouncers following you around, and it seems the comfort of home is loosening Americans’ wallets. In the month of June 2018, sports bettors wagered $310m, whereas the month of October 2021 saw a more than 20-fold increase, to $7bn.
Gambling was once considered a taboo, and even sinful, back before World War II. And, as superstitious or reactionary as that may seem now, gambling has never really shaken off its bad image as a social ill. However, during the last several decades, growing societal acceptance of a whole range of human behaviors has changed the way most people think – and gambling is now largely seen as harmless fun for adults playing with their own money, rather than a threat to moral order. Let's face it – we've all become accustomed to having fun at home in the last couple of years, and sports betting has found its groove. As, of course, has investing in general, whether in crypto or the stock market. The average Joe and Jane have found the time to learn about growing wealth and, critically, how to spot a market that is going to offer big returns.
Odds and betting info are now regularly displayed as part of sports broadcasting, and pro teams are working with betting companies to promote a mutually lucrative endeavor. And even the image conscious, multinational media giants are beginning to move in. Despite the drawbacks, with states like New York, California and Texas still waiting to enter the online gambling market, the online sports betting sector is on the rise.
