The pandemic meant that businesses all over the world were forced to adapt and innovate in order to survive in 2020. This brought a lot of success stories, as successful innovations paid out, and there were a number of examples of this across sectors and businesses last year. The sports industry will perhaps be the biggest example of this, given that live sports was virtually shut down globally for months. This had huge implications everywhere, but perhaps nowhere more so in the United States, which had only recently legalized sports betting all over the country. However, the growth of US online sports betting during this time shows that not even a pandemic could slow down the trajectory of this activity.
2020 saw six states launch legal sports betting operations, while five others legalized the activity, but are yet to begin accepting bets through authorized operators. This was the third calendar year where sports betting was legal, and with more states allowing the activity, it was no surprise that betting volumes and revenues were higher than ever before, even after the impact of the pandemic. It is estimated that more than $240 million was earned across all states that allow sports betting, which is nearly double the revenue generated in 2019, and shows how popular the activity has already become.
Over $21.5 billion was wagered legally on sports across the United States in 2020, with gross revenue to sportsbook operators coming to around $1.5 billion, after paying out winning bets. This is truly a staggering rise, and even more so during a year where live sports were not held for a number of months.
One of the most consistent trends that emerged last year was the continued dominance of mobile and online betting. The pandemic meant that retail betting was largely impossible for the majority of the year, which thereby increased the attractiveness of mobile and online betting. States which offered online betting saw much higher revenues than those that did not, while we saw certain states waive requirements for in-person registration due to the pandemic. The popularity of mobile and online betting has meant that it is likely that more states will begin to offer this option to users sooner rather than later.
Three states crossed the $100 million mark in monthly sports betting volumes – Colorado, Illinois and Tennessee. Colorado has the most progressive sports betting laws in the country, with very few restrictions, while Illinois saw explosive growth after it removed in-person registration requirements. Tennessee, on the other hand, is one of the few states which has only online betting, and naturally this proved to be very attractive during a pandemic.
However, New Jersey ended up as the number one state in the USA for sports betting, going ahead of Nevada. This is quite significant, as Nevada is one of the gambling hubs of the country through Las Vegas, and has had decades to build up a legal sports betting industry. It is also interesting to note that New Jersey would have probably moved into number one spot even if there was no pandemic, looking at the numbers from January and February 2020, before a pandemic was declared. Additionally, over 80% of New Jersey’s betting accounts are mobile accounts, which gave it a huge advantage during the pandemic over Nevada, which has much stricter rules for online betting, and relies heavily on Las Vegas for the majority of its gambling and sports betting revenue.
2020 showed that the sports betting market is still quite concentrated in the USA, with the top six states all crossing $1 billion in betting volume, while no other state managed to cross $600 million. The top five states accounted for nearly $82 of every $100 spent on sports betting in the USA in 2020, and this is a trend that needs to change if the USA is to become a global leader in the sports betting market. With more states legalizing the practice, as well as allowing online betting, we expect this to change in the coming years. It must be remembered that the three most populous states – California, Florida and Texas, are yet to legalize the practice, while New York only allows in-person betting – these alone could provide a huge boost to the sports betting ecosystem if they come on board soon. These states also have some of the reigning champions across major sports leagues, which is another reason why any of these coming onto the sports betting bandwagon will be a huge boost to the industry in the United States.