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How Sports Betting Turned into a Multi-Billion-Dollar Industry

US punters have every cause for celebration as the days when Nevada was the only state with legal sports wagering are now behind us. The Silver State was the only place with legal sports betting for over half a century, offering it since 1949.

 

Things took an interesting turn in 2018 after the US Supreme Court overturned PASPA, the notorious piece of legislation that confined sports wagering to Nevada’s borders.

 

The repeal paved the way for individual states to legalize these activities and set their own regulations. Many states have already taken advantage of PASPA’s demise, which transformed sports betting into a multi-billion-dollar industry. Less than two years after the Supreme Court struck down the restrictive legislation, the sports betting industry witnessed unprecedented growth. 

 

American punters collectively spent an estimated $3 billion on legal sports wagers in October 2020 alone, according to figures released by the American Gaming Association. New Jersey, in particular, broke all records in December of the same year, reporting five successive months of sports betting growth. But the real questions are what has contributed to this unprecedented growth and, more importantly, will it continue in the future?

 

US Punters Recognize the Importance of Betting Legally

 

As sportingpedia.com reported, Punters themselves are a major contributing factor for the industry’s growth. More and more US sports fans have started to recognize the importance of betting with legal bookmakers as opposed to taking their action to unauthorized offshore bookies. There are several reasons for this transition, a survey by the American Gaming Association reveals. 

 

As many as 74% of the AGA survey participants confirmed it is important to wager with legal, US-licensed bookmakers. Indeed, a shift can be observed toward legal bookies in the states that have introduced regulations. The biggest incentive for consumers to shift to legal betting is the confidence of being paid out, followed by the desire to punt legally, the promotional incentives at regulated books, and the news reports regarding legal wagering in some states. 

 

The biggest obstacle in the path of regulated betting is the lack of consumer education. Many US punters are unsure about the legal status of offshore bookmakers, to begin with, especially in states with unregulated betting industries. Some AGA survey participants even expressed surprise when they learned they were wagering on unauthorized websites. 

 

How States With Legal Betting Are Faring So Far

 

It would be an understatement to say the legal sports betting industry is thriving in the US. The revenues in states with legal wagering have soared during the first eight months of 2020, registering a cumulative increase of 31.5% compared to the previous year. 

 

Statisticians observed similar tendencies in terms of handle, which is the overall amount locals have wagered on sports. Much of this unprecedented growth was driven by the industry’s online segment. 

 

Despite the coronavirus pandemic and the lockdowns that ensued, many states reported record highs in betting handle in the summer of 2020. New Jersey is among the leaders in this respect, reporting the impressive $668 million in handle for the month of August alone. 

 

Handle continued to increase at a steady pace over the following months. In December of the same year, the already impressive figures in the Garden State rose further and were just $4 million short of reaching one billion. But New Jersey is hardly the only state to witness such record-breaking growth. 

 

The states of Pennsylvania, Illinois, and West Virginia also scored their highest monthly handle results in August 2020. You can find exhaustive information about individual states’ revenue in this report about the US sports betting market industry.

 

Future Growth of the US Sports Betting Industry

 

Over twenty states have launched legal sports betting for the time being but many others are expected to follow suit. States like Ohio, Texas, Georgia, and Kentucky have all made moves toward legalization but some of the bills were either stalled or are yet to gain the lawmakers’ approval. Arizona is among the states that stand decent chances of seeing legal sports wagering by the end of 2021.

 

The legislature in the Grand Canyon State approved House Bill 2772 with a 23-6 vote in the Senate, paving the way for legal sports and fantasy wagering. If state Governor Douglas Ducey signs House Bill 2772 into law and Arizonians will have access to properly regulated sportsbooks.

 

Ohio is also working hard toward the introduction of legal sports betting via mobile apps and at local casinos. The local legislature’s efforts make sense considering Ohio punters pour an estimated $5 billion into illegal offshore sportsbooks each year. Should the efforts come to fruition, the state will collect 8% from the legal bookies’ sports betting revenue. 

 

The coronavirus pandemic affected the expansion process a little bit but the US sports betting industry still shows no signs of slowing down. Bank of America analysts predict the legal sector could grow by 70% by the end of 2021, reaching punters from 27 US states. 


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