AGA says March Madness betting to hit USD 10.4B

2017-03-15

Reading time 2:11 min

Just days before the NCAA men’s basketball tournament tips off, the American Gaming Association (AGA) is estimating that Americans will wager USD 10.4B on March Madness. The number marks a 13% increase over last year’s estimated USD 9.2B wagered.

Of the $10.4 billion that will be wagered on the tournament in 2017, only about $295 million – or 3 percent – will be wagered legally through Nevada sports books.

The remaining $10.1 billion will be spent on illegal offshore websites or through bookies. Americans annually bet at least $150 billion a year on sports illegally due to the antiquated 1992 federal prohibition on sports betting largely outside of Nevada.

“The federal ban on sports betting is an utter failure – depriving states of vital tax revenues and preventing millions of fans from wagering legally on games,” said Geoff Freeman, AGA president and CEO.

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It’s time for Washington to get out of the way and enable states to reap the rewards of a regulated sports betting marketplace

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Twenty-five years after the passage of the Professional and Amateur Sports Protection Act (PASPA), a growing chorus is calling for a regulated sports betting marketplace in the United States. Regulation can ensure that all betting is transparent and that data is instantly analyzed to determine where nefarious behavior may exist. In the case of the $10.1 billion illegally wagered on the NCAA tournament, data analysis is not possible.

Each year ahead of the tournament:

40 million people fill out roughly 70 million brackets
Average person completes nearly two brackets
Average bet per bracket totals $29
Half of all March Madness viewers have filled out a bracket at least once in their lifetime
Research shows those who fill out brackets online or through mobile applications are more likely to watch March Madness games

The growing illegal sports betting market, which is fueled by a failed federal ban on sports betting, has rapidly pushed sports fans into an underground market with no consumer protections.

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A regulated marketplace, which stands in stark contrast to what’s currently available, would generate tax revenue and jobs for local communities and provide needed consumer protections for fans

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PASPA dictates that Nevada is the only state permitted to offer traditional sports betting. Despite this ban, sports betting has only grown more prevalent.

Further, the United States Supreme Court is considering hearing a sports betting case that could dramatically alter the country’s sports betting landscape. Earlier this year, the Court asked the U.S. Solicitor General to submit a brief in the New Jersey-led sports betting petition. AGA previously submitted an amicus brief urging the Court to consider the failed, unconstitutional sports betting ban.

In coming up with its illegal gambling estimates on March Madness, the AGA took the most conservative estimate of illegal sports betting activity ($80 billion per year) from the 1999 National Gambling Impact Study Commission's Final Report. It applied GDP growth as reported by the Census Bureau to make this current to today.

Finally, the AGA assumed that the proportion of legal gambling activity on the tournament at Nevada sports books is the best available indicator of what proportion it might make up in the illegal market, and applied this ratio to the larger illegal gambling figure.