Cyber Bowl Sunday and dialing in your bet

December 15, 2019 10:00 PM
  • Ken Adams, CDC Gaming Reports
December 15, 2019 10:00 PM
  • Ken Adams, CDC Gaming Reports

It’s becoming increasing evident how significant online and mobile gambling is becoming in the gaming industry. Atlantic City is the leading case study, due to the fact that online casino gambling and sports betting have been operational there longer than in any other state. But as Pennsylvania and Indiana gear up, the trend will become even more obvious.

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In Atlantic City, online gaming has saved the city’s casinos from the last decade’s drastic decline, most of which was caused by gaming expansion in neighboring states. It is uncertain how long online gambling will continue to grow in Atlantic City, but it is likely to be a long-term trend, regardless of what happens with the bricks and mortar casinos.

That trend in gaming mirrors the trend in retail sales. The litmus test for online shopping is the Thanksgiving weekend. Black Friday has traditionally been the day that kicks off the holiday shopping season and puts retail stores “in the black” for the year. Millions of people lined up outside their favorite store early in the morning, huddled in the cold, waiting for the doors to open and to be allowed to surge inside and capture the bargains. There were times in the not-too-distant past when it seemed as if the entire country stood still and every able-bodied consumer was out shopping on the Friday after Thanksgiving. This year, Black Friday was the busiest day for in-store activity with 84.2 million shoppers. Thanksgiving Day itself had 37.8 million consumers, and even Cyber Monday rated 21.8 million shoppers.

As busy as the stores may have been, the majority of the spending was not done in a brick-and-mortar store, it was online or by smartphone. This year, shoppers spent $4.2 billion online on Thanksgiving Day, $7.4 billion on Black Friday and $9.4 billion on Cyber Monday. It is part of the national trend in retail and has been for a while: the lion’s share of consumer spending is moving online. It is not a new trend, and it is not limited to retail. For example, online or on smartphones is where most people get their news, which is forcing traditional news outlets to restructure and reengineer their business models. The internet is also where most people go to plan a trip and book their travel, hotels and tours. There are very few businesses or services that have not been affected by the internet. There is a 21st century rule: whatever can be bought online will be bought online.

Until recently, that rule has not been applicable to casinos, since gaming regulations and federal law prohibited it. But that, too, is changing. The catalyst of the change was the Supreme Court ruling that opened the door to a state-by-state expansion of sports betting. And in some states, that means online and mobile wagering. Not all states that legalized sports betting have also legalized online wagering as well, but the states that have are seeing a dramatic shift to online and mobile. Mobile is fast becoming the most popular platform. In October, mobile sports betting handle accounted for 84 percent of total handle in New Jersey and 82 percent in Pennsylvania. In November, 63 percent of sports wagering in Indiana was done from a mobile platform.

But don’t expect a Cyber Monday of sports betting to sweep the nation. Online sports wagering will not become a national trend the way e-commerce has. Gambling, of course, is heavily regulated, far more so than retail, and those regulations vary from state to state. Some states have indicated, at this stage, that they will not authorize online betting even if they do permit sports wagering. However, that may change over time, as it is likely that the tax generating success in some states will entice other states to follow suit. Michigan and Illinois are in the process now. The numbers for Indiana, Pennsylvania and New Jersey show that it going to be a very successful activity for the operators and for the tax collectors. And we have not yet seen a Super Bowl, March Madness, NBA championship or World Series with mobile betting.

That will be the real test, either Super Bowl Sunday or March Madness. On a slightly smaller scale, they have the potential to become the equivalent of Cyber Monday or China’s Singles’ Day. Singles Day, the biggest shopping holiday in the world, was November 11; sales hit $30 billion for the day. That illustrates the underlying operative principle: the larger the audience, the greater the spending. And nothing delivers a larger audience than the internet and smart phones. They make the potential audience thousands, if not millions, of times larger than would be possible at any physical location. When a popular event, such a nationwide sale or a sports championship, is combined with a large population, it is a game changer. This year in Indiana, Pennsylvania and New Jersey, people anywhere in the state will be able to dial in their bets on the Super Bowl for the first time. The numbers could be staggering on Cyber Bowl Sunday.