When the US Federal government lifted the ban on sports betting back in 2018, there were many predictions about what this would mean for the global economy in the future – and now, in 2023, even the best statistics gatherers couldn’t quite get a handle on what was to come.
Prior to 2018, sports betting online or in person was very restricted, with casinos in Nevada the only place where sports fans could legally place bets. Famously, the sports book at Stardust casino, and others like it, became the benchmark for what sports betting would look like in a casino, with oversized screens and lots of seating, way back in 1975.
So, when the Federal court overturned the PASPA ruling that had previously outlawed sports betting (signed by President Bush in 1992), it was no surprise that the industry exploded – now, states could make money from the gambling that was happening (illegally) by collecting taxes from the sportsbook operators.
As we roll through 2023, there are now 33 states where sports betting is both legal and operational. Only Texas, California, and Florida have not yet legalized the activity. The Federal government left it up to each individual state to make the decision about how this sort of gambling will work, what the tax rate will be, and whether bets can be placed online, in person, or a combination of both.
Surprising Popularity?
Opinion polls around sports betting have shown a shift in acceptance throughout the years. A Washington Post poll found that only 41% of people approved of legalized gambling in 1993 (after the PASPA regulations were written into law), but by 2022 that number had grown to 66%.
It is interesting to see how much appetite there is for bookmakers to create sports betting opportunities. A little late to the party, New York made sports betting legal and available in January 2022, and within the first 30 days New York became the number one spot for sports betting in the whole of the USA, and it continues to grow.
Understandably, for American gamblers, the most popular sports are basketball, football, and baseball. The value of these bets might be surprising, however – in 2022, the amount gambled on each sport is shown below:
- Basketball – $9.5 billion
- Football – $4.8 billion
- Baseball – $3.5 billion
Why the Increase?
In 2022, sports betting saw a 75% increase in revenue year-on-year. This made it the fastest growth area of all commercial gaming segments, and in fact it outperformed every other segment put together.
There are many reasons why this has happened, including the ability of each state to decide how they are going to approach the legal framework that supports sportsbooks, and what the taxation plan will be for those businesses.
The Growth of Technology
Almost every gambling operator across the US has made the most of the online space to encourage players to get involved in all their games, from poker to slots and even in sportsbooks now.
It is probably no surprise to most of us to learn that more than 85% of sports wagers are placed online – it is so much easier and more convenient to use a laptop to place a bet rather than have to physically visit a bookmaker or go to the stadium.
However, the technology in use for sports betting isn’t just about providing a structure for placing the bets in the first place – there are other features that are drawing in new players.
Through our smartphones, we can download a sportsbook app that not only allows us to place wagers at the best odds, but also allows a host of other related activities too. You can bet in-game on a range of different outcomes, from winners to point spreads to scorers. You can make use of the very latest in AI and machine learning to get to know more about the probabilities of a win, including information about historical performance as well as recent news.
Many Americans also use their sportsbooks apps to follow the action live – as the provider offers streaming services as part of the package.
To The Future
According to an Ipsos study, the average sports bettor in the US is male, younger, white, and wealthier than the average. This is not a surprising statistic in any way; but what is surprising is that actually only one in ten Americans actually placed a bet on a live sports game in 2022.
This is especially surprising when we look at the revenue figures.
In 2018, before the PASPA repeal occurred, sports betting revenue was $0.43 billion. By 2021, that figure was $4.33 billion. This performance outstripped even the most bullish predictions by around four times the amount – and the industry is still growing.
There are rumors that California could be up and running with legislation by 2024 – and with a predicted Compound Annual Growth Rate (CAGR) of more than 10% as well as the extension of availability, it is no surprise that by 2028 the revenue is expected to reach $10 billion.
While sports betting might not be the biggest industry overall in 2024, it is certainly set to be the biggest in the global gaming sector.
