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Gambling industry trade publication VIXIO Gambling Compliance forecasts that the US sports betting market could generate upward of $10 billion in annual revenue by 2025.
Data published by the New Jersey Department of Gaming Enforcement revealed that the Garden State ended 2020 in style, handling $996.3 million in December, an all-time record for a single month. That solidified NJ’s hold on the top spot for sports betting in the country.
Bettors in New Jersey wagered $6 billion over the course of the year, obliterating the $5.4 billion record set by Nevada just last year. Per Action Network, that includes $4.1 billion in bets over the final five months, as major sports resumed operations in the second half of the year.
Right behind New Jersey and Nevada, Pennsylvania took the bronze medal for US sports betting handles, worth $3.6 billion of bets on the year.
Pennsylvania sportsbooks capped 2020 with $548.6 million in bets for December, setting a new state record. The previous record was $525.8 million from October. Nearly all of that handle came from online, good for 97.6% share of the market.
MRP has previously covered the growing market in Pennsylvania, fueled by the debut of Barstool Sport’s sportsbook in the state, amid a meteoric rise in the popularity of their social media presence. The app had 61,000 downloads in Pennsylvania through October 24, following its record debut on the app store that saw 35,000 downloads in its first weekend on the market last September. Barstool is partly owned by Penn National Gaming, who maintains a 36% stake in the company.
Last month, Penn’s online sportsbook Barstool handled $71.8 million worth of wagers in PA, racking up $13.9 million in revenue – 42% of the total revenue taken by all gambling apps. The Motley Fool reports DraftKings handled more than $100 million in sports betting in Pennsylvania for the fourth month in a row at $131.5 million, though it only made $5.4 million in revenue, less than half of Barstool’s profit despite handling twice as much in wagers.
Speaking of DraftKings, the company just this week announced the release of DraftKings Sportsbook in Virginia, marking the 12th state in which the top rated mobile and online sportsbook is available. Online sports betting began just this month in the state and DraftKings is the second available sportsbook, following FanDuel’s launch last week. BetMGM also received approval to operate online sports betting in Virginia, but no date has been set for availability yet.
Michigan just fired up their own mobile sports betting market last week as FanDuel, Barstool, and DraftKings went live on day one. BetMGM co-parent Entain said it expects the brand to lead the Michigan sports betting market, capitalizing on MGM’s strong casino presence in Detroit.
Investors can expect significant numbers in this first month of betting in Virginia as handles have lately shown the potential to explode right out of the gate. For the first month of sports betting in Tennessee, wagers totaled more than $131.4 million, the highest first month total for any market in the United States.
Even smaller state markets like Indiana have managed to see full-year handles worth billions of dollars. Hoosiers wagered $313 million on professional and college sporting events in December alone, capping an annual handle of $1.8 billion. last month’s sports wagering handle was a 93% increase compared to the $162 million in sports bets placed in December 2019. It also crushed the previous monthly Indiana sports wagering record of $251 million that just was set in November.
The next major state market to finalize regulatory reform for sports betting is likely to be New York. Though some feared Governor Andrew Cuomo’s state-run model would handicap most major online gambling platforms, Legal Sports Report writes that multiple members of the state assembly have voiced enthusiastic support for a more open system.
The legislation, co-sponsored by Assemblyman Gary Pretlow and Sen. Joe Addabbo Jr., would allow the state’s four full commercial casinos and three tribal operators to partner with two mobile sportsbooks each. That would mean up to 14 sports betting operators in New York even before the future downstate casinos are considered. Cuomo’s plan, by contrast, would leave four legal sportsbooks, at most, to choose from – a list that includes DraftKings, FanDuel, BetRivers, and Bet365.
MRP will continue to watch the development of legislation across several other major state markets over the next few months. Texas, Georgia, and Massachusetts have each begun a process to legalize sports betting.
This surge in legalization efforts comes as many cash-strapped states, recovering from massive spending during the COVID lockdowns, want expedited plans to collect a share of the betting dough via taxes and fees. Last year, sports betting taxes, at rates ranging from 2% to 51%, brought in $118 million across 14 states.
As Bloomberg writes, that tax haul will continue to rise as the industry’s total US revenue climbs toward $5 billion in 2023, according to a November analysis from Eilers & Krejcik Gaming. And if the remaining 24 states legalize revenue, they say, it could top $19 billion. |
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