Sports Betting Industry in the United States

In the US, sports betting once only happened in the casinos of Las Vegas, Nevada. However, things have changed a lot. Since legal sports betting has expanded to more US states, such as California and New Jersey, starting in 2018, the total sports betting revenue generated in the US has increased considerably. Sports betting, especially online betting, has continued to grow in the country despite the reticence or reluctance of many states to legalize the practice.

As you can imagine, one of the main benefits cited by proponents and advocates of legalized sports betting in the US is the tax revenue that states can collect. Also, a recent piece in D Magazine assessed and analyzed how much a state like Texas can benefit from legalizing sports betting.

US Supreme Court Ruling and Subsequent Legislation

US states were given the power to legalize sports betting in 2018. Since that momentous and influential ruling, the country’s multi-billion dollar betting industry has been growing. Sports betting and gambling have had a considerable influence in shaping US sports earning prospects. Did you know that 30 US states, including Washington DC, have legalized sports betting and gambling since 2018?

As more US states continue to pass laws and regulations legalizing sports betting and gambling and the activity remains highly popular across the nation, new industry participants will enter the market in order to benefit from the revenue growth in this industry.

Sports Betting has Great Potential

Legalized sports gambling and betting are paying off for the states that allow them. For example, between Jan and Oct 2022, Americans wagered a whopping $73 billion legally on various sports, up 70% year-over-year, as per the American Gaming Association.

Also, sports betting companies in the US generated about $5.77 billion from these wagers. Legal sports betting in the US started growing after the 2018 Supreme Court ruling striking down the federal prohibition outside Nevada.

Key Statistics

The legalized US sports betting industry doubled in 2021, and over $52.7 billion were wagered during the year, according to data intelligence firm Morning Consult.

The surge was the result of legal sports betting launching in 11 states as well as billions of dollars spent on promotion and marketing by gambling operators and companies looking to attract and engage new customers.

  • 12% of US adults placed bets once per week, up from 5% in Jan 2021.
  • Oddsmakers pocketed about $4 billion of the gross amount wagered in 2021.
  • 14% of bettors claimed their average bet was more than $100.

Sports Betting Market in the US: Industry Overview

The gaming and casino industry in the US is made up of lotteries, casinos, sports betting, gambling, and other activities, out of which legal sports betting and related account for 24% of the total market size with $101 billion.

The types of sports people bet on differs by culture, and the vast number of the mainstream bets are placed on Mixed Martial Arts (MMA), basketball, American football, baseball,  track cycling, hockey,  boxing, and auto racing at both personal and amateur levels.

The US is also the third largest market for sports betting. According to Data Bridge Market Research, the national sports betting market was valued at an impressive US$ 76.75 billion in 2021. Also, it is expected to reach US$ 167.66 billion by the end of 2029, registering a notable CAGR of 10.26 % during the forecast period.

The US Sports Betting Industry is Growing

The global health pandemic may have permanently defined and changed sports betting in 2020. However, it has been a period during which sports betting and online betting were firmly established as powerhouse players in the US. There is no doubt that the close of a tumultuous 12 months just proved how abundant, influential, and burgeoning betting has become in the world’s largest sports market.

For example, New York, which launched mobile sports betting recently, is leading in sports betting revenue with $1.07 billion. And Illinois is a distant second with about $616 million during the same period, while New Jersey is in third place with more than $590 million.

Sportsbooks and Gross Revenue

Although gambling and sports betting are legal under US federal law, each state can prohibit or regulate it as it deems fit. The gross revenue of the gambling and betting industry in the United States reached nearly US$ 53 billion in 2021. You should know that sportsbooks operate as land-based establishments and online. Total sports betting revenue in the Us amounted to US$ 4.33 billion in 2021.

As of Jan 2023, 30 US states, including Washington DC, had operational legalized sports betting. Did you know that Nevada reported a total of 126 sportsbooks in 2021?

Sportsbooks are the store front for sports betting but behind the scenes, sports data collectors provide a vital role for their operations.

Sports Data

For sportsbooks to operate with authority, they need up to the second, reliable, and accurate sports data. As sports games are happening worldwide at every hour of the day, there is an immense amount of data to be collected and streamlined into sportsbooks. Companies like Sportsradar and Genius Sports are two of the leading data providers in the sports betting industry; these companies charge sportsbooks like DraftKings for access to their massive data, a vital component to creating and honoring wagers. There is big money in sports data, and investors are taking notice. Mark Cuban and Michael Jordan have taken significant stakes in the sports data industry. Robel Getaneh, an investor in Genius Sports, tells us that “sportsbooks operate in a highly competitive environment, which makes it hard to invest in them long-term. But on the other hand, the barrier of entry into sports data is much harder, which keeps the competition away.”

Legal Status in Different States

Currently, 30 US states and Washington, DC, have legalized sports betting. It is no secret that more young people are participating. For example, 19% of adults between 21 and 34 have bet on various sports, such as basketball, at least once per week, including offshore and legal sportsbooks. Florida legalized sports betting and gambling in 2021 via a gambling compact with the state’s Seminole Tribe.

States that have permitted sports betting have considerably benefited from tax revenue, especially on sportsbooks. Illinois is one example of a state that legalized online sports betting and gambling. Out of the total $142 million Illinois collected last year from sports wagering and betting, online sports betting accounted for 96% of the revenue.

Note that similar results have been observed in many other big market states with online gambling and sports betting, such as New York, New Jersey, and Nevada.

Latest Drivers and Market Trends

Digital Revolution

Because of the recent global digital revolution, people prefer cloud platforms for storing data. Also, there has been an incredible increase in online payments and transactions among commercial and retail users. The growth and improvement of digital infrastructure and the popularity of wireless connectivity will drive the sports betting market potential and growth rate.

With extensive digitalization and smartphone use, the sports betting landscape has considerably changed, and the international sports betting market has gradually shifted toward convenient online and virtual apps and platforms.

Modern US consumers can easily and conveniently participate in sports betting and connect with various sportsbooks because of better internet access as well as the availability of various mobile applications and online platforms.

Shifting Consumer Preferences and Habits

There’s been a significant change in consumer behavior and habits regarding sports betting and online gambling. The increase in the popularity of social betting and gambling and betting apps is expected to drive the growth of the sports betting market.

The Future of Sports Betting in the US

According to a recent market study by Technavio, the sports betting market share is expected to grow by US$ 106.25 billion between 2020 and 2025. The increasing popularity of instant and online betting clearly shows the need for a top-class sportsbook underpinned by reliable, high-performance technology to meet the demands of the modern American bettor.

As we head into the future and the stigma of wagering and betting declines, there will be exciting new developments that change how people consume sports and how they bet and experience games.




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