Americans bet $125 billion on sports in 4 years since legalization

ATLANTIC CITY, NJ (AP) — Americans have wagered more than $125 billion on sports with legal gambling points in the four years since a U.S. Supreme Court ruling paved the way for all 50 states to offer it.

On Saturday’s anniversary of the decision in a case brought by New Jersey, two-thirds of the states in the country have legalized sports betting.

In just four years, the industry has become part of the daily lives of millions of Americans, from those who spend money hoping for a certain outcome, to those who watch broadcast television with odds calculations, to those who struggle with problem gambling. .

You don’t have to be a gamer, or even a sports fan, to be affected: the industry’s tsunami of publicity is virtually impossible to avoid, particularly on television and radio, but also in other media. For example, FanDuel is the official quota provider for The Associated Press.

On May 14, 2018, the Supreme Court decided a case that had begun 10 years earlier in New Jersey as the longest of the long shots: an attempt to strike down a federal law, the Amateur and Professional Sports Protection Act, that it restricted sports betting to just four states that met the 1991 deadline to legalize it.

Ray Lesniak, the now-retired state senator who filed the first lawsuit against the federal government over the issue, said he acted to provide states with money, protection for consumers and attract experienced European gambling companies to expand to the US. ., all of which he said have happened.

“I made a good bet for New Jersey and for the United States,” he said metaphorically. (Lesniak also placed the first winning legal sports bet in his state, correctly choosing France to win the soccer World Cup, winning $400 on a $50 bet at odds of 8 to 1.)

“When PASPA was repealed, I don’t think any of us would have expected how big the (industry) would be just four short years later,” said Karol Corcoran, general manager of online sportsbook FanDuel.

DraftKings President and Co-Founder Matt Kalish said, “I got into this industry because I was always the kind of kid who liked to predict things, compete with my friends and make predictions. For people who like to do that, sports betting has become number one by far.”

To understand how much $125 billion is, consider this: It’s slightly more than the amount spent on pet food, supplies and veterinary care across the country last year, and more than the net income of American farmers last year. last year.

Of course, much of that money was paid out to people who won bets. After expenses, bookmakers usually keep less than 10% of the total amount of the bets they handle. During the first four years of legal gambling, its revenue figure is $8.8 billion, according to the American Gaming Association, the gaming industry’s national trade group.

One of the main reasons for pushing for the legalization of sports betting was to protect customers from falling victim to unlicensed bookmakers, many of whom operate as part of organized crime. State regulations include strong consumer protections, with watchdog regulators ready to strike when they see violations.

But legalizing sports betting has failed to eradicate illegal betting. Just look at any of the numerous sports betting Facebook groups, where unlicensed books in other countries promote their offerings; An aggrieved punter complained Wednesday that after winning a big bet, he asked his bookie to pay him, only for the man to disappear.

Sports betting has been, and still is, pitched to state lawmakers as a source of new tax revenue, a particularly tempting option in tough financial times. It has generated $1.3 billion in state and local taxes since 2018 according to the AGA, but the amount many states withhold is a drop in the bucket compared to their overall budget. Some states, such as New York, tax mobile sports betting revenue at 51%, a rate that operators say is not sustainable in the long term.

As of Friday, 35 states plus Washington, DC, have legalized sports betting, with 30 of them in operation, according to the AGA. (Kansas Gov. Laura Kelly signed a bill into her state Thursday.) Competing measures will be on the November ballot in a state that has been the Holy Grail for sports betting: California, where disputes between tribal casinos and commercial gaming companies have made the potential outcome unclear. Sure.

Turn on a television and no matter what you’re watching, there’s a good chance you’ll be bombarded with sports betting ads. FanDuel, DraftKings, BetMGM, PointsBet, Bet365 and particularly Caesars Entertainment are hitting the airwaves to promote their sports betting products.

In December, Bill Miller, president and CEO of the American Gaming Association, called the level of sports betting advertising “an unsustainable arms race.” There are calls in some quarters for voluntary self-regulation of the advertising industry in order to avoid the possibility of the kind of strict government regulation that exists in England.

Lawmakers in Massachusetts are already considering banning sports betting ads immediately before, during and immediately after live broadcasts of sporting events. New Jersey Assemblyman Ralph Caputo, a former casino marketing executive, said “the overmarketing of this industry is obscene.”

Kalish, the president of DraftKings, said that the current level of announcements is necessary for “customer onboarding” and compared it to the level of announcements for other new products, such as cryptocurrencies.

“I don’t think it’s necessarily a forever state,” he said of current ad levels.

FanDuel’s Corcoran said the company is happy with its current advertising levels, noting that “the industry is still in growth mode.”

Felicia Grondin, executive director of The Council on Compulsive Gambling of New Jersey, cited a report in Barron’s that said $292 million was spent on sports betting ads in the US in 2020. A year later, it had risen to $ 725 million.

With the added exposure and easier availability of betting on a mobile phone (over 80% of sports betting is done this way in the US) there has been an increase in people seeking help for problem gambling related to sports betting, Grondin said.

In 2018, the New Jersey Council’s 1-800-GAMBLER Helpline received 9,490 calls, 5% of which were primarily due to a sports betting issue. By 2021, the line received 23,977 calls, 23% of which related to sports betting.

“It’s disturbing, it’s alarming, and it’s intensifying every day,” Grondin testified before New Jersey lawmakers this week. “It is very easy to bet today. You can just take out your phone and sit on your couch.”

Four years ago, sports bettors had few options, including predicting the outcome of a game or a player’s performance before the event began. Since then, the variety of potential bets, or “markets,” has exploded, due in large part to an increase in in-game betting, where players can react to events as a game unfolds and bet on consequence. It has become the fastest growing segment of a rapidly growing industry. Many bookmakers now offer and encourage, through free bets or refunds on losing bets, multi-event bets called parlays.

And as more established sportsbooks look to increase their market share, the amount of money it takes to enter the industry and compete continues to grow, to the point where many executives at leading companies say they expect some competitors minors merge or stop doing business.

FanDuel’s Corcoran said the near-term future is all about growing the industry and its individual companies.

“We feel lucky to have access to about 38% of the US population,” he said. “But there are still millions of people who still don’t have legal sports betting. We would love to be able to operate where they are.”

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