Casey Clark, senior vice president of strategic communications for the American Gaming Association recently said "We’ve seen a really remarkable growth that I don’t think is comparable in any other industry," and added "That growth is exceptional."
With more states slated to come into the legal sports betting fold in 2020 and with the sports betting industry as a whole having its first full year of legalization under its belt, 2020 is poised to shatter all analyst expectations as the gambling gold rush continues. Let's take a look at some of the reasons for optimism.
1) States poised to legalize in 2020
Most analysts have set the over/under at 10 states that will legalize sports gambling in 2020. That would take the US to around 30 states with legalization – approximately a 30% increase in the number from the end of 2019. 20 state have legalized sports betting now and as many as 40 have gone through the process of introducing bills supporting the industry.
"A number of states have passed laws, but haven’t formally implemented or launched everything yet," said Daniel Wallach, a lawyer and co-founder of the Sports Wagering and Integrity Program at the University of New Hampshire. "But just about every state has it on their radar."
Illinois, Colorado, Michigan, and Tennessee are scheduled to come online in the next few months but the biggest fish California is waiting in the wings to take the US sports betting market over the top.
California would be the biggest state by far to legalize and alone would take the number of US citizens allowed to legally place a wager to over 50%.
2) The big fish
Eilers and Krejcik Gambling LLC, a research and consulting firm that has provided estimates to California lawmakers has projected the California market bringing in $2.5 billion in wagers annually an generate between $250 and $500 million in tax revenue for the state.
The addition of California to the legal sports betting mix makes sense as five Major League Baseball teams, four NBA teams, three NHL teams, three NFL teams and Major NCAA programs like UCLA and USC call it home.
If Florida and Texas ever come around to the idea of just posing the question of legalized betting to voters in November, the industry could absolutely explode in 2020 and beyond.
3) Mobile Betting takeover
With plenty of data now available, it has become crystal clear that mobile betting platforms are the wave of the future for the legal sports betting industry. Two of the three most bet-friendly states, New Jersey and Pennsylvania have reported over 84% of their handles coming from wagers placed over the internet.
Despite the success of broad mobile betting platforms in some states, other states have been reluctant to adopt easily accessed apps. In some states, bettors have to register at brick-and-mortar facilities which is inconvenient. In other states such as New York, there is no mobile betting at all. The only way to place a sports wager is to visit a rural casino.
Lawmakers are catching on however and seem more likely to adopt a New Jersey of Pennsylvania model over one like we see in New York. With more mobile betting comes more revenues and ultimately more tax dollars, something that providers and governments are looking at closely.
It is getting increasingly difficult to ignore the revenues that successful states are bringing in. High revenues result in impressive tax dollars that states can use for underfunded programs such as education and pension funds.
Of the $15 billion wagered in the US in 2019, it is expected that providers kept about $800 million. Those numbers obviously bring some serious attention to the industry and give operators obvious motivation to get in on the action. Of that $800 million, an excess of $100 million will be taken in the form of taxes to be used by local and state governments to fund much-needed programs.
Legal sports betting is here to stay in the US and seems poised to become a major driver for the economy going forward. Job creation, tax revenue and enhanced enjoyment of the sporting events themselves are a byproduct of legalized sports betting. Those who embrace will benefit. Those who deny will continue to fall behind.