US Sports Betting Market Races for (Online) End Zone
By WAYNE PARRY Associated Press
ATLANTIC CITY, N.J. (AP) — As the second NFL season following a U.S. Supreme Court ruling clearing the way for legal sports betting begins, the industry is growing larger and ever-more mobile.
Some unmistakable trends have emerged. The extra money that taxing sports bets generates has not exactly been a gusher, and the major professional sports leagues still have not succeeded in compelling gambling companies to cut them in on the action, preferring to sign commercial deals.
But the biggest is this: the future of sports betting in the U.S. is online. More than 80 percent of sports bets placed in New Jersey, the state that won the high court case last year, were made over the internet or on smartphones. The question of whether to allow mobile betting, and how to regulate it, has kept several states from entering the market or more fully expanding within it, as is the case in New York.
Chris Grove, a managing director with Eilers & Krejcik Gaming, says fully embracing online sports betting will be the biggest challenge for land-based casinos this year.
“It’s clear that consumers overwhelmingly prefer to bet on sports online,” he said. “Attempting to route consumers through the casino to access online apps will only limit the potential of legal sports betting and pump oxygen into the illegal market. Where would Amazon be if you had to go into a Kohl’s to create your Amazon account before ordering anything?”
Justin Roper, an avid sports bettor from Knoxville, Tennessee, has numerous online accounts with U.S. providers as well as offshore operators. He says the
convenience is a major reason.
“I can be sitting here at my house and instead of traveling to a casino, I have all my computer monitors right in front of me and I can see in a few seconds who has the best odds and make the bets right there and then,” said Roper, 35, who calls himself “The Under Taker” for his fondness for low-scoring games. “I’ll drive as far as I have to if it means getting the right number, but I want to be able to access as many books as I possibly can, and the way you do that is online.”
When the Green Bay Packers and Chicago Bears kick off the season Thursday night, legal bets on the game can be placed in 13 U.S. states: Arkansas, Delaware, Indiana, Iowa, Mississippi, Nevada, New Mexico, New Jersey, New York, Oregon, Pennsylvania, Rhode Island and West Virginia. This time last year, it was only legal in five states.
Sports betting has been approved through laws or regulations but is not yet running in five additional states: Illinois, Montana, New Hampshire, North Carolina and Tennessee, as well as the District of Columbia and Puerto Rico. Colorado voters will decide in a November ballot question whether to allow sports betting there.
Rhode Island began online sports betting Wednesday.
There were 35 states that considered sports betting legislation in the first half of this year, compared to 18 in all of 2018, according to Gambling Compliance, which tracks legislation.
Despite the rapid growth of online betting, casinos are investing tens of millions of dollars in elaborate on-premises sports books. In Atlantic City, The Borgata opened a $12 million project in June that includes a new sportsbook and entertainment project, just over a week after Bally’s opened its new $8.4 million sportsbook. Resorts and DraftKings spent millions more on a sports book there, while the FanDuel sports book at the Meadowlands Racetrack, just outside New York City, is the top grossing facility in New Jersey, taking in nearly $67 million in revenue from January through the end of July this year.
Resorts President Mark Giannantonio said his casino’s in-person sports book has helped boost revenue from slots and table games, food and beverages, though he would not say by how much.
“There’s no question people love to bet online, and we have a great option for that in DraftKings,” he said.
“But we also have quite a lot of people that come to our property to bet on sports, a whole new customer base. It was a natural fit for us.”
Taxing previously illegal sports bets has major appeal to cash-strapped state governments. Yet sports betting has not proven to be the bonanza some might have hoped. An Associated Press analysis shows the seven states that reported on sports betting revenue for the fiscal year that ended in June brought in a total of $74 million in state taxes from the wagers, a drop in the bucket for most state budgets.
The nascent U.S. market is fertile ground for more established European operators, who are flocking to sign affiliation deals with American gambling companies. The U.S. branch of British bookmaker William Hill was an early entrant into the market. Since then, GVC has paired up with MGM Resorts in America, and in a deal announced Wednesday, London-based Smarkets joined with casino developer and operator Full House Resorts to offer online sports wagering in Indiana and Colorado (once it’s legal in that state).
AP writer Geoff Mulvihill in Cherry Hill contributed to this story.
Copyright 2021 The Business Journal, Youngstown, Ohio.