Gambling has been relevant in the United States since the Civil War. The earliest known legal sports betting events were on horse racing back in the late 1800s. The government became wary of gambling on sports when scandals such as the 1919 Black Sox Scandal ruined baseball. This caused heavier restrictions throughout the 20th century, but it did not stop people to illegally bet. In 2017, the illegal sports gambling market was estimated to be $1.6 billion to $11.9 billion. After the Supreme Court repealed the Professional and Amateur Sports Protection Act of 1992 (PASPA) in 2018, states throughout the country started to legalize sports wagering, with 18 in total. As COVID hit, traditional casino sites such as MGM and Penn National lost almost 85% to 100% of revenue. But, online operators such as Draftkings and FanDuel rose due to eCommerce and digital marketing.
When PASPA was repealed in 2018, major stakeholders became interested on these online operators, such as the NBA, NHL and NFL. These partnerships have caused a mutual relationship between each other. As people bet more, they would view games and highlights in order to see if the outcome matched theirs. As sports started to come back around September, these online gambling apps started to pick up attention too, as shown by Google Trends.
Social media has also been a part why sports betting has grown quickly. From Instagram to Reddit, users can post about their wins and losses and even give tips on who to bet on. There are also podcasts that are dedicated to sports gambling with ads targeted to users to sign up on Draftkings and Fanduel with a given promotion code for free entries. Social media companies such as Bleacher Report even has its own betting channel where users can see advice from gambling experts on games and can see how much people have betted. We’ve seen how social media usage has increased due to COVID, and now with sport events happening, there will be an even higher uptick on the former and gambling.
In just New Jersey, the sports betting market made $3.3 billion in the first 9 months of 2020, with $750 million alone in September. With the inclusion of data analytics, users can now pinpoint bets even more using previous information to predict the future. This industry has only touched the tip of the iceberg, and will continue to grow. As more states start to legalize this industry, companies like Draftkings and Fanduel will continue to prosper.
- L, Shannon, and Kat V. What Is the Market Size of the Sports Gambling Industry in the US? 6 Nov. 2017, askwonder.com/research/market-size-sports-gambling-industry-us-2uld0vbox.
- Press, Associated. “Sports Betting Market Expected to Reach $8 Billion by 2025.” MarketWatch, MarketWatch, 4 Nov. 2019, www.marketwatch.com/story/firms-say-sports-betting-market-to-reach-8-billion-by-2025-2019-11-04.
- Sherman, Yaniv. Why COVID-19 Turned Sports Betting into the Next Smart Investment. 2 Sept. 2020, www.nasdaq.com/articles/why-covid-19-turned-sports-betting-into-the-next-smart-investment-2020-09-02.
- Smiley, Brett. A History of Sports Betting in the United States: Gambling Laws and Outlaws. 7 Mar. 2019, sportshandle.com/gambling-laws-legislation-united-states-history/.
- Trends, Google. “Fanduel vs Draftkings.” Google Trends, Google, 2020, trends.google.com/trends/explore?geo=US&q=%2Fm%2F0j6638f,%2Fg%2F11bv3024b3.
- Young, Jabari. “What Turner Sports, DraftKings and FanDuel Could Get out of Their New Sports Betting Partnership .” CNBC, CNBC, 16 Oct. 2020, www.cnbc.com/2020/10/16/what-turner-sports-draftkings-fanduel-get-from-partnership-.html.