Legal Sports Betting Report: Lessons Learned and Opportunities Ahead

BettingUSA.com collaborative report with industry stakeholders: Realizing the American Dream is BettingUSA’s report on the state of the legal US sports betting industry as of April 2021.

Outside of Nevada, the legal US sports betting industry is still in its infancy. Since the fall of PASPA just three years ago, 27 states and Washington DC have legalized sports betting.

Sports betting operators face challenges in the developing US sports betting market. Some operators come to the US with experience in developed European markets, but the US is a unique market that demands a unique approach.

This report discusses the current state of legal sports betting, including the challenges and opportunities operators, regulators, and affiliates face going forward.

Read the Full Report Below:

Executive Summary

The interests of operators and regulators align more often than not as both wish to channel gamblers to legal sportsbook apps and websites. For this report, BettingUSA spoke with key stakeholders on both sides of the industry, operational and regulatory.

  • Patrick Eichner: Director of Communications, PointsBet
  • Simon Noble: Sportsbook Product Director, Champion Sports
  • Dave McDowell: CEO, FSB
  • Douglas Harbach: Director of Communications, Pennsylvania Gambling Control Board (PGCB)
  • Daniel Graetzer: CEO, Carousel Group
  • Joe Kustelski: Cofounder, Chalkline Sports
  • Wes Burns: Editor-in-Chief, BettingUSA.com

Challenges and Opportunities in the US Sports Betting Market

Sports betting industry insiders named multiple challenges the industry faces in the developing US market:

  • Many operators are using legacy technology that lacks flexibility
  • Consumer education is a work in progress; operators and regulators must work to educate consumers on which sports betting platforms are legal and why they should do business with licensed operators
  • Operators and regulators must assure consumers they have recourse in the case of disputes or wrongdoing

These challenges have proven persistent, but the industry’s stakeholders are stepping up to the plate.

FSB’s Dave McDowell on flexibility: Flexibility is “essential if the US sports betting market wants to continue growing in the long run.” Right now, most operators must choose between inflexible black-box solutions or hiring their own trading teams. FSB’s hybrid trading solutions platform allows operators to control aspects of the business they are comfortable managing while leaning on FSB to handle the rest.

PointsBet’s Patrick Eichner on consumer education: Operators must understand the market at the state level and avoid the one-size-fits-all approach for the US as a whole. 

PGCB’s Douglas Harbach on consumer education: Regulators can explore awareness campaigns. The PGCB has not undertaken any such campaigns, but it is exploring options to launch a consumer education program to inform players of which betting apps and websites are legal in the state.

Responsible Gambling Is More Than a Side Note

Champion Sports’ Simon Noble spoke with BettingUSA on the importance of responsible gambling in the US market

Regulators, lawmakers, and operators must be proactive toward responsible gambling. Goodwill abounds in these early days of the US betting industry, but operators should learn from the UK. In the UK, the government is weighing sweeping changes and cracking down on operators as sentiment has moved against the industry amid numerous responsible gambling failures.

With that in mind, industry stakeholders are treating responsible gambling as more than a side note. Responsible gambling isn’t just a box to check off; it is integral to the industry’s long-term health.

Marketing in a Developing Sports Betting Industry

BettingUSA spoke with multiple industry experts on various aspects of marketing in the nascent US sports betting industry. A clear theme emerged: consumer education is critical to successful sports betting marketing in more ways than one.

Each industry expert spoke of consumer education related to brand awareness, channeling players away from unregulated black-market operators, and using a thoughtful and selective approach to advertising.

Media companies big and small have a place in the marketing of legal sports betting. Few traditional media organizations have the experience to compete as operators against established brands such as DraftKings and FanDuel, but their ability to reach millions of fans makes them valuable partners.

Affiliates also play an important role in customer acquisition and player education despite lacking the reach that traditional media organizations enjoy. Carousel Group’s Daniel Graetzer reports “affiliates are playing an ever-increasing role” in his company’s customer acquisition efforts.

Similarly, BettingUSA’s Wes Burns notes that sports betting affiliates can serve the interests of consumers, operators, and regulators all at once by providing timely, accurate, and responsible gambling information. 

Lessons Learned to Date

Douglas Harbach of the PGCB and Patrick Eichner of PointsBet discussed the key lessons they have learned to date.

On the regulatory side, Douglas Harbach cautions operators to be aware that regulators treat sports betting just as seriously as they treat casino gaming. “Just like casinos, sportsbooks must be tightly regulated to ensure that there is integrity in the system.”

On the operator side, Patrick Eichner warns international operators that they face a branding disadvantage relative to the major daily fantasy sports brands. International operators that enter the US market must prove themselves to an entirely new audience that largely does not recognize their names.