Sports betting handle and win is becoming significant nationally. It has gone from a minor part of Nevada casino revenue to the fastest growing segment of the gaming industry. According to Legal Sports Report, since June 2018, $10 billion has been wagered on sports legally in the United States. Seven states contributed to that number: by the end of the year there will be at least eleven states where it is legal. The win from that ten billion dollars in wagers was $626.2 million, a 6.26 percentage hold; and $74.4 million was paid in state taxes.
By way of comparison, for the calendar year 2018, the total win from casinos and VLTs in the country was $42.692 billion. Indian casinos generated an estimated $35 billion and $11.265 billion was wagered on horse racing in that period. Lottery sales for the fiscal year were $77.7 billion. The comparisons are not apples to apples, the handle for sports, horse racing and lottery sales are gross revenue, not net revenue, generally called the “win.” From those numbers one can see the scope of legal gambling in the United States and the increasing importance of sports gambling.
Sports betting is just getting off the ground; it only became legal in May of 2018 when the Supreme Court overturned the Professional and Amateur Sports Protection Act of 1992. The ten billion dollars wagered in the first year indicate it is now possible to predict that at maturity, sports wagering is going to be a major part of the national gambling culture. It will probably eclipse all other forms of legal gambling in gross wagering, if not in the net win. Sports, in general, are extremely popular: television broadcasts of major events draw millions of viewers and the attendance at all levels of competition probably approaches that of any form of entertainment. As legal sports betting spreads it will bring the opportunity to bet on athletic contests closer to the fans. Beginning in the 2019-2020 professional hockey season, fans in Philadelphia will have a chance to bet in the arena.
In the recent gambling expansion bills in other states, sports betting is authorized in some sports arenas. In states without a book at the game, but with mobile betting, a fan will not even have to leave his or her seat to make a bet. The possibilities are staggering and frankly a little frightening. Rabid fans and easy accessibility are going to create a perfect storm.
Recently I had lunch with a friend of mine: he is 27-years old and just beginning his career in business. He expressed an interest in the casino industry and asked me about my career. He wondered what would become of the casino industry as the baby boomers leave the planet, “Who will go to the casinos then?” He said his friends do not go to casinos, play blackjack or slot machines. When I asked him how many of his friends make a bet on sports, the answer was “All of them.” Regardless of age, education or financial status, there is an intense interest in the outcome of sporting contests that is growing exponentially. It may have been apparent to some people before, but nothing has brought home the ubiquity of gambling in our culture more than legalizing sports betting.
In the next year or two we will probably have reached a tipping point. On one side of that divide will be the gaming world as it has been for the last 50 years – a world where the gambler has to travel to a casino, racetrack or lottery sales outlet. The potential audience for that gaming universe was limited by the number of gambling outlets, by the games offered to the would-be gambler and by the demographics of the potential customers.
On the other side of that tipping point is a different world entirely that seemingly has no limits. The betting opportunities are simple devices that nearly every person in the country has in their possession at all times. The games or contests offered to bettors are without limit; they can be sports events, elections, video games and of course the conventional menu of slot machines, blackjack, craps and roulette. Close your eyes and imagine a Superbowl between two of the nation’s largest cities. The stadium is jammed with 100,000 devoted and loyal fans with cellphones in their hands. Sitting at home across the nation are a hundred million people also with cellphones. Now to sweeten the pot, after every play each of those cellphones gets a message with an update on statistics and the opportunity to make yet another wager.
Professor Bill Eadington was an expert on the gaming industry; every state that considered adding casino gaming called up Professor Eadington to testify. Bill was a critic as well as a supporter of the casino industry. He had one very consistent message for legislators: Gambling can be an acceptable form of entertainment and it can provide significant revenues for the state. But it should be isolated and kept away from the most vulnerable among us. Bill thought casinos were best when gamblers had to travel long distances to make a bet. Bill Eadington died in 2013 before sports betting became legal outside of Nevada and before anyone thought that it was a good idea to put a betting terminal in the hand of every fan. I wonder what Bill would have said in the legislative hearings in Pennsylvania or Illinois.
