Charles Gillespie, CEO of Gambling.com Group Plc
2018 has been an historic year for gaming in the United States. Of course, the overwhelming majority of buzz surrounding the gaming industry can be attributed to the Supreme Court’s landmark decision to invalidate PASPA, allowing states to take control of sports betting authorization.
New Jersey, the plaintiff that spent nearly eight years in litigation before finally attaining success in the highest court in the land, has now become the torch-bearer for smart and aggressive sports betting policies.
For all the colossal changes that took place in 2018, 2019 will be equally pivotal. As of the end of 2018, seven states (not counting the single tribal sportsbook in New Mexico, comprising less than 10% of the U.S. population, have legal sports betting.
The U.S. has potential to become the world leader in sports betting, but the growth of the market depends on how willing state and federal lawmakers are to embrace policies that allow the industry to grow and vie for market share with the offshore market.
Will 2019 be nothing but roses for the sports betting industry? Doubtful. But will there be plenty of exciting developments at the crossroads of sports and gaming? You bet. Without further ado, I present my predictions for 2019:
Expect no fewer than 30 states to introduce legislation and at least entertain the idea of sports betting. If approximately 1/3 of the states that appear poised to contemplate sports betting actually pass a bill through the legislature and attain the Governor’s signature, the U.S. will have a total of 16 or more states with legal sports betting by the end of 2019.
High population states like Texas, Florida, and California look like they are still at least a couple years out. The big prize in 2019 will be New York, which flirted with legislation and came close in 2018. While Governor Cuomo was reluctant to endorse sports betting during his election cycle, he is now much more likely to be a vocal supporter.
Chief among reasons New York is so anxious to get sports betting up and running is the fact that they are losing tremendous revenue to their neighbor, New Jersey.
Don’t be surprised if you see a cluster of New England or Midwestern states rushing to authorize sports betting for fear of having their neighbor eat their proverbial lunch. If Ohio, Indiana, Michigan or Kentucky pass a bill, the odds of other states in the region springing into action will increase.
PASPA’s repeal makes sports betting possible, but not exactly easy for companies that want to do business in multiple states. The Wire Act still prohibits interstate sports betting activity, meaning that you won’t see New Jersey sportsbooks offering their online products to folks in Pennsylvania, as much as they would relish that opportunity, until Congress directly addresses this issue. Unfortunately, we’ve seen very little reason to get excited about that possibility.
While Sen. Orrin Hatch from Utah has circulated proposed legislation, it was greeted with a collective shrug of disappointment, in part because it failed to address the Wire Act in any meaningful way for sports betting operators.
With Hatch nearing retirement and a lack of a clear torch-bearer in the immediate future, there’s no reason to hold your breath waiting for Congress to act. As I wrote back in September, state legislatures, not the federal government, will be the ones determining the future of sports betting in the U.S.
Is it possible that the Feds take a step backward and try to limit online sports betting and gaming? If you ask Senator Lindsay Graham, in fact, that would be preferable. But for a multitude of reasons, it's doubtful Sen. Graham gets his wish.
The majority of U.S. states have state-run lotteries, which gives lottery software companies inroads with state governments. But states are going to find out quickly that there’s nothing 'turnkey' about a state agency being tasked with the marketing, risk management, and product development that any competent sports betting operation needs to be successful.
States that think they can grasp market share with a bland and generic sports betting product are fooling themselves – sports bettors are sophisticated customers that won’t settle for an inferior offering simply because it’s 'the only game in town.'
It’s not and the offshore market will continue to dominate if the legal alternative isn’t equally innovative, convenient, and competitively priced.
Take a look at the dozens of sports books that fight for online market share in the United Kingdom, this many companies exist because no two sports betting customers are alike. Sweden just abandoned its online monopoly in favor of a licensure system after years of learning this fact the hard way.
States that try to monopolize sports betting for themselves are going to see embarrassingly low revenues and not be able to recover market share from offshore.
Historically speaking, sports betting really isn’t a casino game. Even before the rise of Las Vegas, there was a neighborhood bookie on every block in most major cities around the country.
The same is true today, only the technology has evolved. Sports betting is something that fans do while watching the big game, and mobile betting makes it easy and convenient for sports bettors to place a bet on their own time.
Thus far, the few states that have authorized sports betting have casinos, but having a casino or racetrack in a state is entirely unnecessary to creating a successful sports betting market. Mobile sportsbook operators don’t need a physical facility to operate, and states are catching on to this fact quickly.
States like Virginia and Tennessee, neither of which have gaming facilities, will be exploring mobile sports betting legislation in 2019. Don’t be surprised to see one or both of these states authorize mobile sports betting, and in the process prove that mobile is a viable and lucrative stand-alone product.
When was the last time you watched a bowling tournament? Would it help if you had some skin in the game? That’s exactly the kind of bet that fringe sports leagues will be willing to take to bolster their popularity and relevance in the public eye.
NASCAR is a prime example of an established league that could benefit greatly from sports betting. After all, if you like betting on horses, why wouldn’t you like betting on a mechanically superior version of a horse that goes in excess of 200 miles per hour? And while an hours-long NASCAR race may seem interminable to casual fans, it may just be more exciting if each lap presents a new betting opportunity.
Of course, some upstart leagues are already banking on sports betting interest as part of their marketing strategy. Football leagues like the XFL and the AAF hope that providing enhanced betting opportunities on their games will help new fans look past the less-than-NFL caliber talent on the field.
Newly established sports betting operators may start simply by offering only betting options on the major U.S. and European sports leagues, but expect sportsbooks to start taking bets on these more exotic offerings well before 2019 is in the books.
New Jersey’s handle continues to impress month after month, showing remarkable growth with no ceiling in sight. This impressive growth is almost entirely due to their thriving mobile betting marketplace, which now makes up over 70% of the total sports betting market in that state.
But can New Jersey’s sports betting market grow to rival the undisputed mecca of betting, Nevada? Right now, New Jersey’s monthly handle is still slightly less than half of the volume Nevada is producing, so Jersey has a long way to go.
It will be interesting to see how sports betting legalization in New York, as well as new sportsbooks in Pennsylvania, affect New Jersey’s bottom line. Nevada has no such worries – Arizona and California are still far from legalizing sports betting due to their complicated tribal politics.
I predict that New Jersey reaches 60% of Nevada’s sports betting volume, but regional competition from Pennsylvania and New York eventually limits Jersey’s explosive growth.
As mentioned above, mobile is already most New Jersey sports bettor’s preferred method of wagering, and mobile handle will likely continue to increase even if physical sportsbook handle starts to plateau. Of course, the convenience factor is tremendous, but it’s also because mobile offers more options for in-play betting, which requires a means of rapid interaction.
It's entirely likely that more and more sportsbook patrons, even those that frequent casino sportsbooks, will still prefer to place their bets on their own device rather than wait in line at a sportsbook window.
In mature markets in Europe, in-play betting comprises over half of all total bets, and as New Jersey operators become more sophisticated, this trend will almost assuredly hold true. The sky is the limit for mobile growth in New Jersey and other states that make the smart choice to authorize mobile sports betting.
There you have it, my U.S. sports betting predictions for 2019. Share your reactions and your own predictions with me on Twitter @charlesgillespi.
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