The legal sports betting industry is booming in the United States, driving growth globally. As of April 2023, 33 states have legalized sports betting, with more soon to follow. Analysts predict the market will generate a whopping $39 billion surplus for betting operators by the end of 2023. However, breaking into the US market can be complex due to the strict regulations and laws governing different betting products in each state.
To enter the US market successfully and legally, operators must first understand local laws in each state in which they wish to do business. This includes knowing which forms of online gaming operations are permitted and adhering to federal laws restricting interstate activity. Sports betting sites must also find ways to remain competitive and capitalize on existing fan bases without breaching any state-based laws or restrictions on interstate activity. Responsible gaming policies, such as age verification procedures, are essential for achieving long-term success in this sector.
The Reason Behind the Boom of the Sports Betting Industry
Sports betting is rapidly growing in the United States, and it’s no surprise why. The legalization of sports wagering at the state level has been a major factor driving this growth. It went from a federal ban in 2018 to now being live and legal, both online and in person, in 33 states, with more on the way.
With 86% of wagers placed online due to the frictionless experience, innovative technologies are further enhancing sports betting. These technologies provide features like in-play betting, AI/ML for better predictions, digital sportsbooks to create predictive models, and mobile applications for live streaming.
This technological advancement is offering new opportunities for investment as well as creating an enhanced user experience that appeals to customers. The Tennessee and Kentucky markets offer a unique opportunity since only online bets are accepted. Hence, these entire industries are pushing towards digital transformation, entirely driven by digital betting platform technology.
Meanwhile, New Jersey serves as a model market based on the wide acceptance of both offline and online betting options available when compared to other US states that have legalized but limited forms or formats. These vary according to state laws or court rulings upheld over time.
iGaming Vs. Sports Betting: Understanding the Difference in Gross Win and Strategies for Maximizing Revenue
iGaming and sports betting have significantly evolved since their inception. To maximize revenue in the US sports betting industry, it’s essential to comprehend the key discrepancies between iGaming and sports betting concerning gross win and hold margin. Greater importance should be placed on generating opportunities for multiple wagers instead of solely relying on parlay wagers, as repetitive wagering leads to higher gross wins.
Comparatively, iGaming shows a much higher average spend than sports betting due to its high turnover and low margin. States, where iGaming is legal, have an average annualized gross win per adult of $160, while sports betting generates only $60. Additionally, states with both iGaming and sports betting available show that iGaming generates significantly more annual gross wins per adult.
Marketing strategies should consider these trends to maximize revenue potential for both iGaming and sports betting products. Integration of products across multiple platforms optimizes customer acquisition, retention, and loyalty schemes and increases the exposure of all gaming products.
Promoting job creation through enhanced consumer confidence in gaming providers will encourage participation in traditional gaming activities like land-based casinos and lotteries.
Sports Betting Gross Win to Reach $23.2 Billion by 2030
Sports betting is gaining a lot of traction in the United States, and research by betting entities forecasts significant growth in US sports betting gross wins, which are expected to reach $23.2 billion by 2030. It’s estimated that 57% of this revenue will come from states where sports betting is already legal, while 43% will come from states that are expected to pass laws legalizing the activity.
While California has the greatest potential for growth in sports betting, recent ballot votes make it unlikely that anything will be passed for at least four more years. However, Ohio launched its first sportsbook on January 1, 2023, and Massachusetts followed suit on January 31, 2021.
Currently, online sports betting gross wins as a percentage of GDP in legalized states stand at approximately 0.065%. This rate could increase further when compared to other key European markets where substantial online horse race betting is available, and it contributes significantly to total online betting gross wins.
Expansion of in-play wagering should also help drive future growth; it currently accounts for 50% of the handle and 44% of gross wins. This figure compares with 64% (excluding horse racing) in Europe overall, although soccer’s lower figure brings down this average considerably. However, “stop-start” sports such as basketball and tennis boast 84–89%.
Summing Up
The US sports betting industry is rapidly growing, with 33 states having already legalized it and more likely to follow.
Innovative technologies have driven the majority of wagers online, and the legalization of sports betting at the state level has driven revenue growth. This expansion is expected to reach $23.2 billion by 2030, with half of the handle and gross win coming from in-play wagering.
