Boardroom Bookies The U . S . sports betting industry ’ s journey from chump change to big business
By Jess Marquez
From the moment that the U . S . Supreme Court repealed the Professional and Amateur Sports Protection Act ( PASPA ) on May 14 , 2018 , the U . S . sports betting industry has actually become an industry , rife with investment , research and development , mergers , acquisitions and everything else included in a typical MBA curriculum .
The manner in which sports betting has oozed across time zones and state lines has been similar to the way that ketchup comes out of a bottle , or how a tire goes flat , or how , as Hemingway said , one goes bankrupt — gradually , then very , very , quickly .
In the span of six short years , bookmaking has grown from a low-impact Nevada monopoly to a nationwide pastime , with a total of 39 markets ( including Washington , D . C .) currently offering in-person or mobile betting , or both . Several more could also join the fray by the end of their respective legislative sessions , including Georgia , Missouri and Minnesota , and the lingering behemoths of Texas and California have long been circled as the next biggest targets beyond that .
Of course , this slapdash cavalcade has been borne out in the data , which is why the gold rush for licensure and expansion has been so cutthroat .
According to figures from Legal Sports Report , U . S . sports betting as a whole brought in $ 309.7 million in handle and $ 24.6 million in revenue in June 2018 , the first official post-PASPA month ; by January of this year , those numbers had jumped to $ 11.6 billion and $ 1.2 billion , respectively .
In its recent State of the Industry report , the American Gaming Association announced that the sector tallied $ 10.92 billion in revenue in 2023 , a new record and an impressive 44.5 percent increase from 2022 .
Despite its respectable growth in the first few years of this new reality , however , this record jump is most easily attributable to the fact that the industry quite literally went full mainstream last year with the introduction of ESPN Bet and Fanatics Sportsbook , both of which cannonballed from the top rope with deeper pockets and broader influence than even the biggest operators could match .
Following a high-profile bidding war with DraftKings last spring , Fanatics , the merchandise and licensing giant headed by ebullient CEO Michael Rubin , scavenged the remains of PointsBet ’ s U . S . operations for $ 225 million in June , in addition to the company ’ s $ 250 million advertising deal with NBC . Then , in early August , Penn Entertainment announced it was eschewing its previous deal with counterculture kings Barstool Sportsbook in favor of Disney-backed ESPN Bet , investing an additional $ 1.5 billion in cash and $ 500 million in stock in order to do so .
The statement from ESPN Chairman Jimmy Pitaro following the announcement was , and perhaps still is , indicative of the symbolism behind both deals — Pitaro said the motivation to move into sports betting was “ simple : to give fans what they ’ ve been requesting and expecting :” more action , not just from ESPN , but from anyone who can offer it .
“ Broadly , sports betting is a business that fits nicely alongside a variety of businesses . The casino business is chief among them , but media , collectibles , merchandise and other sports-related businesses have meaningful and profitable ways to intersect with sports betting .”
— Chris Grove , Partner Emeritus , Eilers & Krejcik Gaming
28 Global Gaming Business APRIL 2024