US SPORTS BETTING IN 2023 only 17 % of the global sports betting market ; right now it accounts for 50 % of the land-based global gaming market gross win and over 30 % of the landbased global lottery market gross win .
Looking ahead , H2 forecasts US sports betting gross win to reach $ 23.2bn by 2030 . In terms of confidence in future forecasts , H2 has not had to alter its forecasts on the US sports betting market by more than 5 % in any of the past four years , when excluding the impact of the Covid-19 pandemic in 2020 , a significant uptick in free bet activity in 2021 and the pushing back of a handful of new state launches in 2022 .
While it is impossible to forecast a “ black swan ” event such as the pandemic , H2 believes that promotional activity has now become more rational . And although the timing of new state launches is inherently subjective and potentially subject to change , 57 % of our projected future growth is from states where sports betting is already legal . Only 43 % of the market growth will come from states where sports betting is expected to legalise in the coming years .
LIVE BETTING TO DRIVE FUTURE GROWTH ?
One of the key drivers of growth going forward is expected to be the higher adoption of in-play wagering in the US . The focus of US sports betting operators over the past year has been on parlay wagering , which accounted for 15 % of handle but due to its stronger hold margin of c . 20 % made up 37 % of gross win .
43 % of the market growth will come from states where sports betting is expected to legalise in the coming years
However , H2 ’ s analysis suggests the driver of gross win is repetitive wagering opportunities rather than hold margin . This is evidenced by the higher average spend of igaming over sports betting .
Igaming is a high-turnover , low-margin product , and the average annualised gross win per adult in US states where igaming is legal is currently at c .$ 160 , compared to c .$ 60 for sports betting . In-play betting accounts for well over 50 % of betting activity in Europe . Data reported in Oregon suggests it is similarly popular in the US market , accounting for 49 % of handle – although in-play betting on US sports is currently lower than this , with the overall market number inflated by tennis and soccer . Given the stop-start nature of US sports H2 expects that over 80 % of US sports betting handle could come from in-play bets going forward .
A NEW VARIATION ON LIVE BETTING ?
Micro betting could be a key driver to increase in-play wagering of US sports to levels of that seen in Europe for basketball and tennis , with the majority of wagering activity being incremental to existing spend . H2 estimates that micro betting could generate up to $ 3.3bn of gross win by 2025 , with the base case being $ 2.5bn of gross win .
The battle for market share in the US has been fierce but a clear winner has emerged in the online arena over the past 12 months .
FanDuel has gained a substantial lead in online gross win market share
thanks to its superior parlay product and arguably best-in-class risk management , which deliver a structurally higher margin than its competitors . When looking at net win , its lead is even greater .
THE FACTORS THAT SHAPE US SPORTS BETTING ’ S FUTURE
However , market share can change over time , and H2 believes there are three events that could drive material change in the market :
• A change in market dynamics as operators look to shift from top-line growth to profitability , leading to a reduction in promotional spend and potentially lower investment in product by some operators in an attempt to balance the books
• The increasing sophistication of customers , meaning that product becomes even more important than promotions or brand – this could be driven by the growing significance of a strong and diverse in-play product offering / micro-betting
• M & A activity to generate scale through inorganic means
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