Sports Betting Industry Recording Big Numbers Across Board for 2022
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Note: This is part of a series reviewing the major sports betting stories of 2021. Check out this story on how the three biggest states – California, Texas and Florida – are faring in their efforts to get sports betting launched.
The gambling world is all about numbers.
Odds. Point spreads. Dollars. Even stock prices.
In gaming, bigger is better. So, the bigger the numbers, the grander life is, or at least it appears to be. In keeping with that sentiment, 2021 was a record-shattering year for sports gambling in the United States.
In 2021, 11 states launched sports wagering in the U.S. market. Well, technically one could argue it was 12 but Florida’s short-lived online sports gambling effort on the Hard Rock sports betting app was shut down after about a month by a federal court.
More States, More Sports Betting Handle
That brings the latest count of sports gambling jurisdictions in the U.S. to 30 states and the District of Columbia, whether it’s retail sportsbooks only, online sports betting only, or a combination. A handful of other jurisdictions have legalized sports gambling (notably Ohio) but have not launched yet.
Propelled by simply more states with sports gambling, the volume of sports gambling handle – the money that customers put into play – skyrocketed in 2021.
RELATED: Eight Predictions for U.S. Sports Betting & Online Gambling in 2022
For comparison, let’s start with 2020, when there were 20 sports gambling jurisdictions and a total handle of about $21.5 billion, led by New Jersey’s approximately $6 billion.
In 2021, with more jurisdictions in play and sports gambling marketing picking up steam, the handle will likely double year-over-year, topping $40 billion. It almost certainly will surpass $50 billion when the counting is done sometime in early 2022.
New Jersey Still Market Leader
New Jersey has been considered a bellwether for sports gambling with a robust market of retail sportsbooks in Atlantic City casinos plus a competitive online sports gambling landscape with sports betting apps in the double digits.
In September, New Jersey became the first state to hit the magic 10-digit mark, registering just over $1 billion in sports betting handle. The record stood just a month as New Jersey’s October was even higher at $1.3 billion. November’s handle came in a shade under the October record. For the year so far, New Jersey’s handle has been about $8.5 billion in 10 months, more than 40% higher than all of 2020.
Of course, football was the reason for New Jersey’s three-month run of $1 billion-plus handle, but sportsbooks are counting on customers becoming more familiar with sports wagering options and the momentum continuing through the Super Bowl and into the winter. College basketball’s March Madness is always another high point for betting.
While New Jersey has eclipsed Nevada as America’s sports gambling capital (at least in dollars), the old guard in the Silver State showed it could also generate big numbers. In October, Nevada joined the billion-dollar club by generating $1.1 billion in sports betting handle that month, nearly doubling the amount in October 2019, before the COVID-19 pandemic.
Nevada’s performance was especially impressive when accounting for a couple of disadvantages compared to New Jersey. Nevada relies on in-person live sportsbook action far more than New Jersey and, logically, the various COVID threats dampen in-person sportsbook patronage. Also, Nevada regulations require that customers register for online sports wagering in-person at a brick-and-mortar sportsbook, as opposed to New Jersey, where customers can register online to gamble on sports betting apps.
Overall Gaming Revenues Up 306.5% Over 2020
Looking at revenues, the American Gaming Association painted a rosy picture of sports gaming in 2021 in an examination of the year’s first three quarters. From January through September 2021, sports betting yielded $2.74 billion in gross gaming revenue. That was an increase of 306.5% compared to the first three quarters in 2020 and an increase of 413.7% compared to the same period in 2019 when there were far fewer jurisdictions where sports bettors could legally place wagers.
MORE IN YEAR-END SERIES: Ten Moments that Defined Sports Betting in 2021.
Overall, the combination of sports wagering and iGaming (internet-based slots and table games) accounted for $5.36 billion in gross gaming revenue for the first nine months of 2021, underscoring a new reality in the gaming industry that online betting is now an important piece to the industry’s big-picture business model. The combination of sports betting plus iGaming was nearly 14% of all GGR for the entire gaming industry, as measured by the AGA.
For the gamblers themselves, there has been an inflation in the amount of money players are willing to risk. There was a time when a million-dollar bet was a thing of Las Vegas lore. Now, it’s a matter of how many millions. For the last Super Bowl, a reported $3.46 million was placed on Tampa Bay (+3.5 at -127 odds) by the now-famous “Mattress Mack” Jim McIngvale. The Bucs didn’t need the points, beating Kansas City, 31-9.
But while McIngvale’s wagers are tied into his Houston furniture store promotions, other pure-risk players are frequently laying seven- and six-figure bets in the new era of sports betting.
Race To Acquire Customers Ongoing
In terms of corporate numbers, the jury is still out on how the industry, or some components of it, are faring.
DraftKings sportsbook, one of the leaders in online sports gambling, has been on a high-profile tear.
The company has been aggressively moving into new sports betting jurisdictions, spending lavishly on advertising and marketing partnerships, using attractive promotions to acquire and retain customers, launching new enterprises and making business acquisitions.
Meanwhile, each quarterly earnings report is a litany of company accomplishments with an attendant bottom-line loss in the hundreds of millions of dollars.
When DraftKings launched as a publicly-traded company in 2020, its stock price was about $20 a share. Despite losses that sometimes hit $300 million a quarter, the stock enjoyed investor enthusiasm as it reached a 52-week high of more than $74 earlier this year. Just after Christmas 2021, the DraftKings stock price was sitting at about $27 a share.
Like some of its component players, much is yet to be discovered about sports gambling in America. Its roles as an economic driver, as a vehicle to raise tax money, and as a cultural influence all remain questions. The answers, if they ever fully become clear, are yet to come and are probably years away.
Yet, one thing that is certain, the clues will all arrive wrapped like gaudy presents in very big numbers.
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