On Saturday, May 14, one of the fastest-growing markets in the history of the gaming industry celebrated its fourth anniversary. On that same date in 2018, the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992 (PASPA) and opened the door to the state-by-state legalization of sports betting.
Since then, 35 states and Washington D.C. have already legalized sports betting, and half of American adults (130 million) can currently place legal sports wagers in their home market, according to a review issued Saturday by the American Gaming Association's President and CEO, Bill Miller. Since May 2018, $125.4 billion has been wagered on sports, and legal sports betting has generated more than $1.3 billion in taxes for state and local governments from $8.8 billion in total sportsbook revenue.
Also in the past four years, gaming companies and leagues, teams and media companies have formed 310 partnerships. "This is certainly a vast departure from the pre-2018 status quo, when a sportscaster’s veiled reference to a bad beat was usually the most the industries would intertwine. Now, new partnerships are delivering value for leagues, teams and broadcasters while deepening fan engagement," Miller said in his social media post.
"The unprecedented growth of legal wagering in four short years clearly demonstrates the failure of the federal government’s ban on legal sports betting. It also has served to mainstream the casino gaming industry, generating increased interest from Wall Street, policymakers and media," he added. "I’ve been in and around politics my whole career and I’m hard-pressed to come up with any issue that has been as resoundingly adopted by states in such a short period. And there’s a reason for that: policymakers understand that regulated, legal sports betting provides a safe alternative to the illegal market while generating important tax revenue".
Furthermore, AGA's leader also cited data showing that Americans are in favor of gaming’s expansion, with about three-in-four (73%) American adults supporting legal, regulated sports betting for adults in their state, according to American Attitudes surveys conducted in both 2020 and 2021. And this was reflected in ballot elections, as every state that has put sports wagering on the ballot has passed: Arkansas (2018), Colorado (2019), Louisiana (2020), Maryland (2020) and South Dakota (2020).
When analyzing mature markets, Miller noted that regulated sports betting brands make up more that 85% of sportsbook searches in legal markets like New Jersey and Pennsylvania. However, he still sees pending issues to address in terms of illegal wagering, as offshore sportsbook brands' search grew by 38% between 2020-2021. "These brands are looked up more than three (3.6) times as often as a regulated equivalent nationwide—Bovada alone accounts for 50 percent of all sportsbook searches," he said.
In this sense, more than half (55%) of consumers who placed most of their wagers with illegal operators believed they bet legally, Miller warned. "This reinforces not only the importance of consumer education but also the need to crackdown on illegal operators that continue to take advantage of customers who are often unaware they are betting illegally. That’s why the American Gaming Association recently called on the U.S. Department of Justice to use their power to investigate and indict these operators."
Nationwide, the latest data shows that a busy sports calendar in the first quarter of 2022 drove sports wagering revenue to a record $1.58 billion, up 64.6% from Q1 2021, narrowly surpassing the previous high set in Q4 ($1.55 billion). The legal betting handle for the quarter also reached a record $26.34 billion. This was more than double (102.3%) the $13.02 billion bet in Q1 2021, reflecting growth in consumer demand, the addition of six new legal markets and the addition of mobile betting platforms in New York.