H2GC Reports The US and Sports Betting | Page 3

Executive Summary
H2 undertook a ‘deep dive’ independent analysis during the summer of 2017 into the US market – both quantitative data and
qualitative operator opinion. It was undertaken to sense check existing numbers out there, and help provide an impartial perspective
during the current debate whether or not to regulate sports betting in the US. The seven main conclusions are:
1. Global sports betting has grown from $41.6bn to $58.9bn GGR (or $1.2tn handle) over the last decade (2006-
16) - with online growing at 10x the rate of all land-based activity.
2. In comparison, US sports betting has declined by -2.8% CAGR over the same period - from $5.2bn to $3.9bn
GGR (or $78bn handle).
3. H2 does not track black market activity as standard, but has calculated the 2016 US illegal (grey and black)
market to be $196.2bn handle (or $10.4bn GGR) – significantly higher than the $150bn handle figure currently
published by the AGA (American Gaming Association).
4. As context, this number is over 47x the current US legal sports betting market, or nearly 1.5x the total handle
for all gambling taking place on the Nevada Las Vegas Strip in 2016.
5. This analysis means that 97% of all US sports betting in 2016 was ‘illegal’.
6. If PASPA 1992 is repealed, H2 estimates an 8-10 year roll out until a regulated US sports betting market
reaches its full potential – defined by a ‘European style’ land-based and online offer covering c18 States, and
valued at between $6.1-$7.9bn GGR.
7. In viewing the future of US sports betting in advance of the New Jersey Supreme Court case, H2 found that
most operators feel just repealing PASPA isn’t enough. The strong desire is for a fresh approach to new US
legislation with a core Federal regulatory template that sets out the highest level of operator requirements.
H2 concludes that the US has a unique opportunity to put in place a ‘gold standard’ regulation for sports betting if it chooses to,
evolving the sector further, and drawing on key lessons learnt by those markets that have gone before it.
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© H2 Gambling Capital 2017