The growth of the US sports betting industry has been steady since the repeal of the Professional and Amateur Sports Protection Act (PASPA), giving each state sovereignty over the regulation of sports betting.
However, there is still a belief that we are yet to see the ‘explosion’ moment of sports betting, and that there is plenty of untapped potential in the market. And that is borne out by the financial data. According to Legal Sports Report, sports betting revenue since the repeal of PASPA is $1.2B, but this is well below the predictions that industry analysts made ahead of the May 2018 decision. For example, Eilers & Krejcik Gaming predicted that over $3B of revenue would be generated by the end of 2019.
It’s clear that industry growth will need to accelerate to reach the $6B annual revenue by 2023 target set by Eilers & Krejcik Gaming. There are numerous factors that might facilitate this, but the introduction of 5G data networks is the catalyst with the greatest potential impact.
Firstly, it is important to recognize that for US sports betting to maximize its market opportunity, mobile wagering will need to be a key driver. The best indicator of this is current revenue statistics in New Jersey, where the mobile sports betting industry is most advanced.
Despite also having a robust casino industry (Atlantic City), mobile sports betting accounted for 82% of all sports betting revenues in New Jersey in 2019. That figure rose to 87% in January 2020.
This illustrates that the potential of mobile sports betting channels vastly outweighs retail sports betting opportunities, even if operators were prepared to roll out expensive retail shops, or kiosks at locations such at sports stadiums.
Of course, the impact that 5G will have on mobile sports betting in the US will be influenced heavily by progress in state-by-state regulation, the signs around which are overwhelmingly positive.
In addition to New Jersey, the states of West Virginia, Indiana, New Hampshire, and Pennsylvania have all launched regulated mobile sports betting operations. Iowa, Nevada and Oregon also permit mobile sports betting for players that open their accounts at a casino. Rhode Island offers mobile sports betting through its state lottery.
In addition, Illinois, Michigan, Tennessee and Washington DC have passed legislation permitting mobile sports betting, although no operators have launched in these states yet. According to Action Network, some estimates predict that as many as 40 states will have regulated sports betting in some form by the end of 2021.
For many telecoms companies, 2020 is earmarked as a year of transformation, with plans to roll out 5G wireless data networks that could revolutionize the capabilities of mobile technology. Devices that connect to these data networks will be substantially more powerful; the extended scope of 5G, which is much more significant than a simple step-up from current 4G networks, will nurture the development of new products and services.
Specifically, this extended scope will be the result of two major performance upgrades. The first is a substantial increase in bandwidth, enabling more consumers to access data networks and run software that requires larger quantities of data to perform well. The second is a huge reduction in latency; vastly increased speed makes web page loading and communication virtually instantaneous, and real-time streaming possible.
The transition to 5G could have a seismic impact on the US sports betting landscape that catapults growth. Reasons for this significant growth include:
1. In-game betting
In the UK, 70% of sports betting wagers are made after the event has started. Despite sports offerings such as the NFL and baseball being less free-flowing than European soccer, this preference for in-play betting hasn’t yet been replicated in the US.
That might change with the advent of 5G. In our latest iGaming research report, 25% of current and potential future US sports bettors told us that they would likely place more in-play bets following 5G’s implementation, and a further 10% said that they were not familiar with in-play bets currently but would consider making such bets in the future.
20% of US players are concerned about their smart device’s connectivity, 19% feel that they aren’t provided with enough data to make an informed betting choice, and 18% are worried they will not be able to place their bets in time. Vastly improved connectivity, zero latency, and the ability to leverage both to send and receive increased volumes of data could quell these issues.
2. In-stadium betting
Another area where 5G may strongly impact the sports betting industry is placing bets while attending live sporting events. Connectivity issues are having a severe impact on players’ current desire to place bets while attending sports events, but the increased bandwidth and coverage of 5G would be a game-changer.
48% of sports bettors think it will become commonplace for fans to be able to mobile sports bet seamlessly while attending major sporting events such as the Super Bowl. For 33% of fans it is important that stadiums become 5G-capable to facilitate in-play sports betting, while 38% of sports bettors are more likely to place bets when attending games if able.
Regulation permitting, the introduction of 5G has the potential to be the springboard for mass adoption of sports betting in the US. The widespread appeal of paid fantasy sports and the success of operators such as DraftKings and FanDuel in the US indicate that offering players the opportunity to bet on individual occurrences via an enhanced in-play betting experience may prove extremely popular with fans. A 5G data network not only gives sports betting operators the chance to offer that in players’ homes, but also in public places including 100,000-seater stadiums.
All Paysafe research is taken from our Q1 2020 iGaming report, The evolution of mobile sports betting: Assessing the impact of 5G on the online gambling industry. The report is available to download now.