The Future of Sports Betting in the USA According to ESPN

Over the last week, ESPN writers David Purdum and Ryan Rodenberg published an incredibly in-depth and well-researched piece that looks at the future of sports betting in the United States. After conducting dozens of interviews over a span of four months, ESPN has put together an extremely detailed look at the likelihood of legalized sports betting, covering everything from how it would work in practice to the long term effects a legalized sports betting market would have on the United States.

There have been many attempts to predict the future of sports betting in the US, but this particular piece offers what may very well be the most realistic preview of a regulated sports betting market. Not only does it discuss potential legalization routes, but it goes into great detail discussing the technology, likely stakeholders and much more.

Today, I’ll offer a very brief summary of the series with key points included, but you really should read the whole thing:

• Part 1: The Marketplace
• Part 2: The Bettors
• Part 3: The Pitfalls

And just to emphasize that point – seriously, you should read the whole series for yourself. My recap looks fairly long at 1200-ish words, but the full ESPN series goes into much greater depth. I made it a point not to rip off the entire article and therefore left out many key details and other interesting anecdotes. You’ll get the basic summary right here just fine, but ESPN and the authors of this article deserve the clicks.

Part 1 in the series discusses the likely paths of legalization, the technology that would power a legal US sports betting industry and what the market would look like as powerful companies get involved.

The first part explains that there is talk of repealing PASPA (Professional and Amateur Sports Protection Act of 1992), which is the one piece of legislation at the federal level currently prohibiting states such as New Jersey from legalizing and regulating sports betting. The article also notes that a congressional committee was recently convened for the purpose of reviewing federal gambling laws and possibly suggesting a repeal of PASPA.

If that happens, all states other than Nevada would then need to amend their own laws if they wish to legalize sports betting. The ESPN article notes that this would likely be a drawn out process with some states opting in quickly and others taking a while to come around to the idea of legal sports betting.

One of the more interesting revelations from the ESPN article has to do with who would actually act as bookmakers in a post-regulation sports betting market. Although there’s no doubt all the current major players in gaming would take an interest in sports betting, there are also indications that major technology and finance firms would like to get a piece of the action as well.

The authors of the ESPN series point to a number of betting-related patents that have been filed recently by the likes of Microsoft, Sony, Reuters and Cantor Fitzgerald. They even spoke to a former INTERPOL investigator who said he expects to see major data companies such as Google and Bloomberg creating massive sports betting enterprises leveraging their experience in data management and using existing infrastructure to bring sports bets to customers around the world.

Key Points from Part 1

• Major technology and finance companies are already filing betting-related patents
• There is talk in Congress of repealing PASPA
• The US would likely become the largest betting market in the world
• Licensed betting sites will likely be competing with unlicensed offshore sportsbooks for a long time to come
• Peer-to-peer betting exchanges will probably be developed alongside traditional, fixed-odds betting sites

Part 2 in the series describes the future of the “bettors” or customers of sportsbooks in a regulated market. I found this part of the ESPN series particularly interesting as it paints a darker-than-expected picture of the future. You would think a fully regulated market with healthy competition would be good for all of us Average Joes out there, but it might be Average Joes who get it the worst in the end.

The opening line of part two sets the tone for the rest of the article:

“There is an ongoing arms race between elite sports betting syndicates.”

To put it short, technology may one day replace the human mind when it comes to making profitable picks. Not only will computers use sophisticated algorithms to spot trends in sports data and betting lines, but they may very well be used to closely monitor athletes in real time on the field.

The authors of the piece point to tracking cameras, microchips embedded in uniforms and even implantable tech designed to gather information directly from the athletes’ bodies. Imagine a computer supplied with reams of data collected from past sporting events combined with real time heart rates, respiratory rates and oxygen levels being used to find the most advantageous wagers almost instantly. Now imagine trying to compete against that as a standard recreational bettor.

Eventually, the ESPN article explains, betting syndicates will compete with one another to identify profitable wagers and earn money for syndicate managers. Eventually, the sports betting equivalent of financial hedge funds may even accept public money as an “investment.” As the regulated sports betting market matures, the lines between financial trading and sports betting may begin to blur.

Key Points from Part 2

• Casual bettors are likely to find themselves competing against increasingly sophisticated competition
• Large betting syndicates will harness the power of technology to provide a return for syndicate members
• The lines between financial trading and sports betting may begin to blur in the future

Part 3 in the series addresses the potential pitfalls of legalization. More specifically, they discuss the ramifications legalization would have on gambling addiction and the integrity of sports.

The authors of the ESPN series point to Australia as a case example of what we want to avoid here in the United States. Initially, the legalization of sports betting in Australia had little impact on gambling addiction. However, that would only last during the early phase which was dominated by state-owned betting company TAB and smaller, local bookmakers.

Things changed drastically after major international sports betting sites entered the Australian market and brought with them serious marketing budgets. Before long, commentators were casually discussing the latest betting lines and broadcasts were inundated with advertisements for online betting sites. The authors of the article draw a comparison to the similar inundation of fantasy sports ads we were all mercilessly subjected to during last year’s NFL season.

Regarding gambling addiction, the authors do provide anecdotal evidence from a gambling treatment center in Australia that seems to indicate there has been an increase in addiction, but provide no hard numbers.

The remainder of Part 3 delves a little deeper into arguments for legalization. For example, they provide quotes from industry insiders who believe legalization would pave the way for more effective monitoring of suspicious betting patterns that could indicate max fixing and other scandals. As it stands now, the current situation isn’t exactly ideal anyways with offshore bookmakers taking in billions of dollars’ worth of wagers in a completely unregulated environment.

Key Points from Part 3

• There are legitimate concerns regarding gambling addiction and the integrity of sports
• Case studies show we must take care in how we approach legal sports betting
• There are also good reasons in favor of legalization and regulation

In Conclusion

The overall impression I got from the three-part series is that legal sports betting in the United States is more of a matter of when rather than if. There are certainly some issues that need to be ironed out, but the same could be said of any emerging industry. When you have major tech and finance companies patenting betting systems, professional sports league commissioners supporting legalization and members of Congress considering legislation, well, it all starts to seem inevitable.

Update: In 2023 ESPN started offering online sports betting in partnership with Penn Entertainment.