Legal gambling apps have driven over $220 billion in US sports bets within the past five years since the Supreme Court cleared the way for all 50 states to offer it.
According to a report by the American TV network Public Broadcasting Service (PBS), the legal betting industry has enjoyed a meteoric rise despite numerous sports betting scandals that have highlighted the need for stronger safeguards.
The industry has made its way into most US homes through advertisements aired during some of the most popular sporting events and non-sporting programming.
Furthermore, two-thirds of the country already offer legal sports betting, with more states expected to follow suit.
“Legal betting is already part of mainstream sports culture, and I anticipate this trend will grow as adoption increases,” said Jason Robins, CEO of DraftKings, one of the industry’s two dominant companies.
“The accessibility right now for fans to place a live, micro-bet during a game, for example, shares parallels with other smartphone-powered capabilities like hailing a ride, buying a stock, or playing a podcast.”
How Sports Betting Became Legal?
Sports betting became legal five years ago, after a 10-year-long bid to overturn the Professional and Amateur Sports Protection Act of 1992 that formerly restricted sports betting to just four states.
Since its legalization, professional sports leagues have partnered with gambling companies, and sports stadiums have been festooned with sports betting advertisements. Betting odds have even become an integral part of a lot of sports broadcasts.
The legalization of sports betting presents numerous opportunities and concerns for its stakeholders.
The industry provides additional tax revenues for state governments, creates a small auxiliary revenue stream for casinos and horse tracks, and keeps many people away from the dangers of unregulated offshore gambling websites.
However, it has also caused problems, prompting some people to seek help for gambling addiction. Calls to issue centers for gambling addictions have reportedly increased by 15% within the last five years.
Sports Betting Helps Drive Additional Revenue to Businesses
The sports betting industry has also helped businesses bring in additional revenue.
For one, it has transformed the Meadowlands Racetrack in northern New Jersey. The FanDuel sportsbook, which is part of Meadowlands Racetrack, combined with FanDuel’s online operation, takes almost half of every dollar wagered on sports in New Jersey.
“Sports betting has saved the day,” said Jeff Gural, who operates the track. “I don’t think the Meadowlands would be open as a racetrack now without sports betting.”
Sportsbooks generally keep about 10% of all the money they handle after paying out winning bets to customers.
The amount of money kept by sportsbooks since sports betting was legalized five years ago is $17 billion, while sports betting taxes on operators have generated nearly $3.6 billion.
The gambling industry and most major professional sports leagues have adopted stronger standards for their own advertisements in an attempt to do something about the proliferation of gambling, particularly sports betting ads.
It is worth noting that almost 70% of the US sports betting market is dominated by just two companies: FanDuel and DraftKings.
FanDuel accounted for just under 46% of the market by the end of 2022, while DraftKings had over 25%. Other major players are BetMGM and Caesars Entertainment, each accounting for 12% and 6.7% of the market, respectively.
DraftKings is expected to turn a profit at the end of this year, with BetMGM expected in the latter half of this year. FanDuel became the first to report a profitable quarter in the second leg of 2022.
Read More:
- FanDuel extends partnership with Spotify’s The Ringer
- FanDuel Bets Big on Online Gambling Loophole, Appears to Have Odds
- DraftKings NFT Marketplace Review – Sports NFT Platform
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This article was written for Business 2 Community by Ruholamin Haqshanas.
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