It has been over a year since the Supreme Court of the United States weighed in on the matter of legal sports betting. Since that time, the industry as a whole has achieved phenomenal growth. Sports betting has launched in several states and it is in the pipeline for many more.
Are you among those impressed by the spike in interest in sports betting? We are too, but we also note that we haven’t seen anything yet.
More Dominoes are About to Fall
The ruling from SCOTUS dropped on May 14, 2018. By the end of last year, seven states had decided it was time for Nevada to stop having all of the fun.
New Jersey has led the way and captured a lot of attention as a result, but that’s just a piece of the pie. Arkansas, Delaware, Mississippi, Nevada, New Jersey, New Mexico, New York, Pennsylvania and Rhode Island all have active sportsbooks and/or mobile betting apps operating right now.
Multiple other states have passed laws to legalize sports betting and are just waiting for the first operators to launch, while even more states have legislation in the works.
For some perspective on the massive amount of growth which is on the horizon, consider this snippet from a recent CNBC piece on the meteoric rise of legal sports betting.
“More than two dozen other states are lining up to either consider such legislation or to activate new laws already on the books. By the end of this year, bills are expected to be considered in at least 35 states, according to Gambling Compliance, an industry research and consulting firm. By 2024, the firm estimates, as many as 40 states could allow sports gambling. Based on population, roughly 50% of Americans will live in states that have some form of sports betting by the end of next year.”
Let’s allow that to sink in for a moment. By the end of 2020, about half of the US will reside in states in which it is perfectly legal to wager on sports. To say that’s a major development would be a massive understatement.
When Done Correctly, Sports Betting is a Boon for States
In the years leading up to the SCOTUS ruling, there was a ton of debate on what legalized sports betting would mean for the states themselves. Now that over a year has passed, we have some clear answers.
As one of the states leading the charge for legal sports betting, New Jersey makes for an interesting case study. To put it simply, the NJ sports betting experiment has been a monumental success.
We recently took a look at the sports betting revenue numbers for the month of June in NJ. Since legalization last year, over $3 billion in wagers have been placed.
That has translated into over $200 million in revenue for sportsbook operators, as well as more than $23 million in tax dollars added to the state’s coffers.
This is far from just an NJ success story. For 2018 as a whole, sports betting revenue on an industry-wide basis spiked to over $430 million in 2018. That’s a healthy rise from the greater than $261 million reported for the prior year by the American Gaming Association.
The long and drawn out process to answer the question of legalized sports betting is now in the rear-view mirror. States that were ready to hit the ground running have already started to benefit. That should provide more than enough food for thought for states that remain on the fence.
Growth Possibilities are Massive, but the Caution Flag Needs to be Observed
According to Gambling Compliance, the sports betting market in the US is poised to hit $5.7 billion by 2024. While it looks like there’s nothing but blue skies up ahead, some observers note that tapping the brakes on the optimism wouldn’t be the worst thing in the world.
Chris Grove, managing director at research firm Eilers & Krejcik Gaming, noted as much in comments to CNBC.
“Roughly 50% of the U.S. population will live in states that have some form of sports betting by the end of next year. The more voices you have singing their own melody, the rougher it is to get a chorus.”
That’s an excellent point which helps to bring the enthusiasm back into perspective. Sure, it’s fair to say that sports betting in NJ has been a big success. But does that mean we’ll be able to say the same thing about all of the other states which are slated to come on board?
After all, success in this case requires that a number of different moving pieces work in a synergistic manner. Experiences will naturally vary depending on the state, but things can get rather complicated when discussions about millions of dollars in revenue and potential tax implications begin taking place.
In addition, some states seem inclined towards dipping their toes into the waters of sports betting without going all in. For example, New York has approved sports betting for several upstate casinos, but the question of allowing mobile betting in the state remains unanswered.
In West Virginia, the mobile rollout for online sports betting has left something to be desired. Fixes are on the horizon, but the state could be benefiting even further if everything was going off without a hitch.
As sports betting is legalized in additional states, there’s a good chance we’ll see more success stories like NJ, but there could also be several bumps in the road before everything runs smooth.
For example, some of the biggest potential markets in the US are shaping up to be the most difficult. New York has had all kinds of trouble getting anything done with mobile betting.
California is also proving troublesome with the various tribal interests, card room operators and legislators all pulling in different directions. Likewise, Texas has been slow to move on anything related to sports betting.
In any case, it has been a fascinating ride thus far. As it stands right now, we’ll all be able to buckle in and enjoy the sights and sounds for the foreseeable future to boot.