Mark Henricks 04 Nov 2019 // 8:59PM GMT
In May 2018, the U.S. Supreme Court repealed the Professional and Amateur Sports Protection Act of 1992. Once the federal ban on sport betting had been removed, states can now come up with their own rules for sports gambling.
“Since then there’s been a slow burn of states getting their acts together to allow sports betting,” says Dave Finn, who directs the Draft Kings account for Taylor in New York. Draft Kings took the first bet in August 2018 when New Jersey became the first state to allow retail and mobile sports betting.
Others followed the Garden State’s lead. West Virginia was next to okay online sports betting. Indiana has since signed off on online and app betting. In other states, sports betters can place wagers in casinos or with retail sports books.
At the moment, 13 states have legal, regulated sports betting industries, according to Legal Sports Report. Those include Nevada, Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania, Rhode Island, Arkansas, New York, Iowa and Indiana.
Tribes in New Mexico and Oregon are offering sports betting. Another six states have passed legalizing legislation and are waiting for the games to begin. Those are Illinois, Maine, Montana, New Hampshire, North Carolina and Tennessee.
However, a number of legislatures failed to approve sports betting. “It appears that sports betting has hit its first pause in expansion as a number of states considered sports gambling in 2019, but did not pass legislation,” says James L. Johnston, a partner in the sports practice at New York City law firm Davis & Gilbert. “For many states, one of the biggest concerns is fitting sports gambling into a framework where tribal gaming is dominant,” he explains.
Sports Betting Popularity
While it may not be smiled on by most state legislatures, sports gambling is a winner with bettors. “Sports betting is unbelievably popular. Look how fast New Jersey has eclipsed Mega in terms of revenue,” Finn says, referring to the more-established UK sport bookmaker MegaBet. “New Jersey sports betting activity has already eclipsed sports betting in Vegas,” he adds.
Sports gambling is already a sizable industry. Legal Sports Report estimated in October 2019 that Americans have put down more than $12 billion in legal sports bets from June 2018 through this October. Of this, $858 million went to sports books and states kept $103 million.
Sports Betting Demographics
Sports gambling appeals to a demographic skewed toward younger males. Men represent 69% of core sports bettors, who have placed a sports bet with a casino or online or through a bookie in the last 12 months, according to an American Gaming Association survey. And 45 percent of core bettors are ages 23-34, the survey found.
Core sports bettors number 32.8 million and another 18.8 million casual bettors have bet in the last year with family, friends or on a fantasy league or pool, the association says. However, the survey found most Americans – 61.1% or 143.1 million – lacked interest in sports gambling.
David Beaudoin, a statistics professor at Lavalle University in Quebec who writes about sports gaming as “Professor MJ,” began placing online sports bets as a teenager in 1999. Beaudoin says young bettors are more likely to embrace the activity because they’re comfortable betting online and will come of age in an era when sports gambling is seen as mainstream.
“Technology facilitates sports betting, and the 18-30 demographic was raised with the internet,” he says. “Sports betting's 'bad reputation' will fade as time goes by, and the young people won't feel like they're doing anything wrong.”
Biggest Gambling Sports
Not all sports are benefiting equally. “NFL football is the biggest driver of sports betting,” says James Bigg, senior manager of communications for Toronto-based TheScore, which launched the first North American mobile sports book.
“It's a sport which is perfectly suited to in-game and prop bets, and historically has always driven betting intent even before it was officially legalized in the U.S.,” Bigg says of the NFL. After football, baseball, basketball, hockey, and soccer are the betting leaders, he adds.
Finn notes that golf is another sport popular with sports bettors that is likely to become more so. “Golf is a format that works well for the sports bettor,” he says. Bettors like the opportunity to place a variety of wagers on golf tournaments,
Basketball has particular appeal to the fast-growing category of live betting, Finn adds. “You’re getting live lines in the middle of games and you can react to what’s going on front of you. You’re not locked into the line you got before the game.”
Mobile betting using smartphone apps is another way of wagering that is growing rapidly and isn’t limited to any sport, Bigg says. “In terms of actual growth, it's the betting formats and methods, rather than the sports, that will see the most growth and developments in trends,” he says. “In September, 84% of bets placed in New Jersey were done so through a mobile device. Mobile is very much the future of sports betting.”
Ads and Sports Betting
Sports gambling has a difficult relationship with advertising. The patchwork of state regulations rules out national ad campaigns. It may be illegal in some states to advertise sports betting at casinos in neighboring states where sports gambling is legal.
Advertisers are finding ways to work with sports betting. “Because of the limited availability and legality of sports betting among states, the advertising market for sports betting remains focused on two areas (a) local advertising, and (b) sponsorship,” Johnston says.
“Gaming operators are leveraging sponsor relationships with teams and leagues to generate national exposure and local advertising to target consumers in markets where sports betting is legal,” he adds. Without further legal changes, particularly to the federal Wire Act of 1961, true national advertising for sports betting will remain unlikely, Johnston says.
PR and Sports Betting
Public relations' role in all this is to make sports betting part of the mainstream sports conversation, Finn says. Signs point to that happening, he adds.
“There are mainstream shows now specifically about sports betting, talking about the odds and process,” Finn notes. Going forward, he sees professional communicators’ job as humanizing and putting faces on the name of companies such as Draft Kings.
The ultimate goal is to help people understand how legal sports betting makes sports more fun, Finn adds. The strategy for accomplishing that is to accurately inform media outlets about sports betting. “It’s up to us to get journalists the best and most updated information from our clients to make sure they’re accurately telling the story to their readers and viewers,” Finn says.
The Future of Sports Betting
It seems clear that legal sports gambling is here to stay and will be a significant presence. But Joe Favorito, a New York City sports marketing consultant and lecturer at Columbia University, urges marketers to maintain a long-term perspective.
“Like fantasy sports, there’s a perception this s going to be easy money,” Favorito says. “But this is an evolving business. It’s going to take years to fully mature. It’s going to be a massive business. But will it be bigger than things like media rights? I don’t think it will.”
Technological evolution, particularly faster 5G cellular networks to improve the mobile betting experience, is key. Maintaining security and the integrity of the games is likely even more vital. “That’s the most important thing,” Favorito says. “Everybody has to realize that if something is not on the up and up, that can bring down a sport very quickly.”
For the moment, the stories coming out of sports gambling are positive. The number of jurisdictions where it’s legal is growing, revenues are expanding, and states are taking in more tax money.
While it is still the early innings, first quarter, semifinals or some other sports metaphor, indications are that sports gambling will be an entertaining experience and profitable business. “There’s still a lot of progress to be made,” Finn says. “That will continue in 2020 and beyond.”