The Rapid Growth of Legalized U.S. Sports Betting
Online sports gambling continues to thrive in the U.S. The latest states to go live were New York (Jan. 8) and Louisiana (Jan. 28), taking the number of states with open-market legalized online gambling to 16.
VIP+ partnered with consumer insights firm Maru Group to assess the extent of online sports gambling in the U.S. Our findings show that 1 in 10 adults said they had placed an online bet in the first three months of 2022, with one-third of these coming from new gamblers.
A key finding is that gamblers tend to pay more attention to a game they have gambled on. This has two potential implications for TV networks. The first is it suggests that viewers will be more likely to note in-game ads given their heightened attention, with one particular area to focus on being gambling-related stats on-screen that can be sponsored.
Another implication is that sports gambling will increase time spent watching games. If a game is a blowout, many in the audience will tune out for other entertainment options. But a viewer who stands to win if a player achieves a certain target may be more likely to continue watching.
Asked what they bet on in the first three months of the year, the data suggests how popular sports betting is among gamblers, with the majority betting on at least two of the listed events. The Super Bowl was the most popular betting event in Q1.
That the NBA regular season outstrips the NFL is to be expected given there were only two weekends of NFL regular season games in the quarter. Also note that close to half of betters said they had gambled on the annual "March Madness" tournament.
Maru also looked into the most popular sportsbooks among the sample of sports betters. Fantasy sports firms DraftKings and FanDuel, which have pivoted to gambling, have a clear lead over the rest of the field, which includes brands from traditional big Vegas casinos. This indicates how sports-focused brands have a built-in advantage, especially considering that fantasy sports and sports betting share several similarities with regards to stats and performance.
The most recent month with full data available from state gaming officials reporting on wager amounts is January 2022. (Arizona is the sole holdout for February data, and Virginia does not report data on total wagers placed.) That showed a staggering $8.2 billion was wagered online for sports that month, led by gambling newcomer New York.
It is important to note that $8.2 billion in placed wagers does not equate to gamblers spending $8.2 billion on apps for two reasons. The first is this includes promotional credits made available to gamblers, whether these are a deposit match or straight-up credit, such as the $300 Caesars Sportsbook was offering new accounts in New York.
The second is that money earned is often reinvested as additional bets. Say an individual bets $50 on a parlay and nets $250 in winnings. As it stands, that’s $50 wagered. If they then stake $200 from the new total, that equates to $250 wagered.
Even so, over $8 billion is a staggering amount to see wagered in a month, even if that month was the highlight of the sporting calendar, with regular-season NBA and NHL games to go with the NFL postseason. Given the 15 reporting states account for 35% of the total U.S. population, it is not hard to imagine that if online sports gambling were legalized in all 50 states, total wagers in January could hit $20 billion.
There are six other states or territories where online betting is legalized but controlled by a single state-appointed vendor or is only available in casinos. These are Connecticut, D.C., Montana, Rhode Island, Arkansas and Mississippi, the latter being a state where the casinos recently killed a number of state government bills to legalize mobile sports bets.
On a month-by-month basis, there is a clear upward trajectory in the amounts being wagered. This is obviously aided by more and more states legalizing online sports betting over time, but there are spikes in the data. These often coincide with the start of both the NFL regular season and the postseason, suggesting that the NFL is a major driver of increased gambling activity.
Read VIP+’s special report on sports gambling “Sports Betting: Media’s Growing Interest in Legalized Gambling.”