The development of the US sports betting sector has been one of the most remarkable developments in the US economy over the last few years.
The rapid growth of new sportsbooks providing odds on global sports events and best offers for new customers has eclipsed other sectors and led to a scramble for betting licenses from sportsbook operators around the nation.
Yet, three and a half years after the Supreme Court decision that triggered the gold rush - are there any signs that the growth is slowing down?
The PASPA Act of 1992 had effectively made it illegal for any territory outside the previously established sports betting market of Nevada to offer sports betting. However, the Supreme Court struck down the federal ban in May 2018 and the reaction was an explosion in legalized sports betting.
The following month, Delaware and New Jersey launched their sports betting industries. Mississippi and West Virginia followed suit in August and Pennsylvania, while Rhode Island and New Mexico went live in November 2018.
Six more states followed in 2019, including New York, Arkansas, Oregon, Iowa, Indiana and New Hampshire. At the time of writing, 30 states offer some form of sports betting.
Five more states, including Ohio, Nebraska, Massachusetts, Maine and Maryland, are expected to launch their sports betting industries at the end of this year or in 2023 and many others have started the process of legalization.
Only Idaho, Wisconsin and Utah have yet to take any steps towards legalization, and of those three, only Utah – which has an anti-gambling clause in its constitution – is unlikely to do so.
One of the most remarkable aspects of the growth in popularity of sports betting is how resilient it has been to the effects of COVID-19 and the ongoing problems of inflation and high gas prices.
It seems that each major sports event spurs a growth in betting handle, whether that is the World Series, the start of the NBA and NFL seasons or big horse races such as the Belmont Stakes.
Although part of the growth is driven by new states launching sports betting, much of the increase is being seen in states that have had legal sports betting for months or even years, indicating that there is still a growing demand for sports betting opportunities.
For example, in June this year, New York, which launched its mobile sports betting sector in January, saw its betting handle pass $1bn. The longer-established markets of New Jersey and Nevada took in $633m and $490m that month, while Philadelphia came in fourth at $393m.
While those big betting markets have dominated, it is clear that sports betting is a nationwide phenomenon. In the summer, it was estimated that US sports bettors had wagered over $125bn betting on their favorite sports in the years since PASPA was repealed.
That has translated into an overall profit for the betting industry of $8.8bn and $1.3bn in local and state taxes.
The path to legalized sports betting has not always been a smooth one, and some states have faced considerable delays in getting the industry off the ground. Some of the wealthier states are included in that bracket, including the potentially massive sports betting market of Florida.
The state had brought forward what it felt was a viable sports betting model, but it fell afoul of the local Seminole tribe who took legal action.
A District Judge subsequently ruled that Florida had not followed the relevant guidelines in the Indian Gaming Regulatory Act, because sports betting in the state should only be conducted on tribal land.
The Seminole tribe operates the online Hard Rock Sportsbook along with six casinos in the state, and their objections have been replicated in other parts of the US, where gambling – in the form of casinos – has for many years been a tribal operation.
A similar dispute has delayed the progress of sports betting in California and elsewhere, and there is a possibility that these objections could cause national growth in the betting industry to slow down.
Another factor that could contribute to a slowdown in growth is the possibility that the issue of problem gambling will attract national attention - which could in turn lead to political opposition in those states that have yet to finalize their legal gambling sectors.
Ultimately, it is hard to see any significant slowdown in the growth of popularity of sports betting until all US states have reached a final position on legalization.
At that point, it is possible that there could be some consolidation, however, sports betting’s popularity is also being driven by sports television and the increasingly prominent relationship between the betting sector and sports coverage - which is set to continue expanding over the next few years.
Although the growth in sports betting across the US has been remarkable since 2018, there are no immediate signs of slowdown and the popularity of betting on sports will continue to trend upwards throughout the rest of the first half of the 2020s.
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