For millions of Americans, betting on sports is getting easier all the time. And they seem to like it. That’s the conclusion of a new survey from the American Gaming Association. The trade group says betting on the Super Bowl this year is accounting for $16 billion in wagering from more than 50 million Americans. The AGA says 57% of American adults now live in a legal sports betting market. Joining WAMC’s Ian Pickus for analysis is Vice President of Research of David Forman.
How has the sports betting industry changed over the past year?
Well, it's really, I think it's grown up over the past year, right We're almost five years out from the Supreme Court decision which allowed states to decide for themselves whether to legalize sports betting, and since then, I think legal sports betting has really expanded at a pace that nobody would have anticipated a few years ago. I mean, today sports betting is legal in 36 states and in 2022, Americans would have wagered almost $100 billion legally on sports, something that they weren't able to do safely in the past.
Here in the northeast, Massachusetts just allowed a legal sports betting to begin just a couple of days ago, and it appears Vermont will follow suit sometime soon. How long do you think until every American can bet on sports legally?
Oh, I don't know if we'll ever get to every state legalizing sports betting. There are a couple of states, Hawaii and Utah, which have no legal betting at all, even a lottery. So, I don't know that every state will ultimately legalize sports betting, but I think in the next few years, ultimately, the vast majority of Americans will have access to legal sports betting options. I think right now, Florida and Texas and California are kind of the big, big markets that have yet to open up. But there's proposals and work being done in all three of those to make sure that people in those states have the option to again, that was that was legal regulators who offer consumer protection and access to responsible gaming tools for consumers.
What percentage of the overall gambling dollar is now coming from sports betting? I mean, obviously, there's been you know, horse racing and lottery and casinos, that all predates sports betting.
Yes, sports betting is still pretty small portion of the overall US legal market, right? Depending, you know, half of the market is tribal betting and it's hard to get data for some of that stuff. But overall sports betting is somewhere in like the 5%-8% range of the total US industry. So, it's a hot topic right now. It's something that a lot of people are getting access to for the first time. But in terms of the total market size of the industry, brick and mortar casinos and slots and table games are still dominant, but sports betting has been growing every year and as more people get access to it, and as more people realize that they have legal options, I think we'll continue to see that share grow.
What about the difference between in person sports betting at legal sports books and the growing trend of online sports betting through apps? How does that break down?
Well, consumers want to bet online for the most part. Last year about 90% of sports bets were placed online and it's just a different experience, right? Going into a sports book in person is fun, especially for really big events and when you're when you're with friends going out for the day or for the night. But most people don't live that close to a casino, they're not able to go to the casino sports books every day or for any given event and people want to bet on sports from their home with their friends or at a bar, again with their friends, or another social setting together with people. And so again, you see the vast majority of betting being done online or on people's phones.
Are people still using under the table bookies or that kind of thing?
They are. People are certainly still using bookies. People are still using unregulated offshore websites. And I think especially because of the long history of sports betting kind of being this illegal, kind of under the table activity in almost every state for a very long time. Sort of this culture growing up around these illegal operators, it's going to take time to get people to realize that things have changed, and to educate them about legal options. But that's one of the benefits of the legal opt market is that people are exposed to advertisements from legal operators who can raise awareness of those options, and all those advertisements come with responsible gaming messages, and all those legal apps and websites come with responsible gaming tools. Again, that aren’t available to people who are betting at the corner with their bookie, certainly, but also not online, with the sports books that are based in Latin America, the Caribbean or in like, the Isle of Man and in the Channel.
Well, obviously the Super Bowl is the most anticipated sporting event of the year. So, it's a bit of an outlier, I would imagine. To what extent can you break down the number of people who maybe have placed a sports bet or they wanted to put some money down on the big game versus people who are regularly betting on sports and can provide stability for this emerging market in practice.
The Super Bowl is the single biggest betting event of the year. About 1% of all the money bet on sports over the course of the year is bet on the Super Bowl. And you're right, it is the Super Bowl and March Madness to some extent too, are kind of unique betting events in this country, right? A lot of people will bet, place a traditional bet with a with a sports book on them, but a lot of other people will bet what we call casually, but an office pool or a squares contest or a bracket challenge for March Madness. I think what's interesting is that this year, for the first time, in our Super Bowl research, we're seeing more people, a greater percentage of betters are going to place one of those traditional bets, with a sports book, rather than as part of a bet with a friend or squares contest, and I think one of the reasons for that is the expansion of the market, right? A majority of Americans now have access to place those kinds of bets legally and safely. And so, a lot of them are moving their business in that direction.
What are long term projections, though? I mean, this has sprung up in states and it's been exciting for those states when they receive their first-year revenue reports from legal sports betting. But, public officials, including like the New York State Comptroller have warned that it might not be a long-term strategy to bank on such revenue. This could be something like a bubble, is that something the industry is worried about?
No, I don't think sports betting is a bubble at all. I mean, I think even in states, more mature markets are seeing that, again, people are moving away from illegal operators, to legal places, and even in a place like Nevada, right? Five years ago, when the Supreme Court overturned PASPA and gave states the opportunity to legalize that there was concern that that would hurt the sports betting industry in Nevada, because people had other places to go. But the exact opposite has been the case, right? Sports betting handle in Nevada has boomed since then, we've seen continued growth and betting in states that have been online for a while, like New Jersey or like Iowa. And so, I think you're going to see continued, more measured organic growth in a lot of states over the next few years. New markets coming online, give kind of a good one-time boost to the overall market size. But, certainly not a bubble, I think you'll continue to see people discover the excitement that comes with betting legally.
So, just one more thing. Is there enough market for all of the different competitors who have rolled out sports gambling operations, or skins, as they're called, different apps that are available? Because, as I say, here in the Northeast, as we've watched this expand, you can't go a commercial break without seeing all this competition for the gambling dollar.
It's an interesting question. It's kind of a hot topic in the industry, but it's really a state-by-state phenomenon, right? In the Northeast, you have a state like New Hampshire where there was really only one operator. And then you have other states, not in the Northeast, but like New Jersey, or Ohio that have a multitude of operating licenses available. And so, there's a lot more competition there. So, in terms of competition and consolidation, I think, really, it's going to be a state-by-state phenomenon, and we'll see how the market develops and how, how the industry reacts, right? It's a new industry. There's a lot of a lot of entrants in it, and it'll certainly mature over the next 5 or 10 years, and that'll look different in each market.
