If you’re an entrepreneur with money to spend, looking for the next great business idea to get involved in, you could do a lot worse than setting up a sports betting company. It’s been a little over a year since sports betting was legalized across the United States of America, and one by one we’re seeing states passing laws to get involved in the emerging industry. In every single case, it’s been a financial boon for the state, and a major win for revenues. Almost half of all Americans now live in states where betting on sports is legal, and the remaining half probably don’t have long to wait.
It was May 2018 when the floodgates finally opened for betting companies to expand out of Las Vegas and take their trade nationwide. The Supreme Court ultimately ruled against the Professional and Amateur Sports Protection Act, and seven states were already accepting bets on sports at all levels by the time 2018 came to a close. The objections of the opponents to the move were noble – they feared that large bets placed on sports (and college sports in particular) could lead to corruption, and even match-fixing. So far, there’s been no sign of that happening, but there has been plenty of money entering the system. $8bn in bets had been taken by the end of the year. For the fourth year in a row, casino revenues increased – this time by a factor of 3.5%. Where revenues grow, so do businesses. When new premises open, new jobs are created, and new businesses open around them to serve visitors to the area.
The figures for this year are even more encouraging. According to the same sources we’ve quoted above, during the first quarter of 2019, sports betting had increased 175% overall from the equivalent period during the previous year. The market is now established and growing, and it’s showing no signs of slowing down. In Arkansas alone, approval has been granted for the construction of four new casinos. Arkansas was the 25th state to give sports betting the green light. In states which have been involved in the game for longer, new premises have already been opened.
The biggest problem the casino may now face is itself. In some places – with Chicago a particular hotspot – so many casinos have sprung up that some of the smaller operators are being choked out by the new competition. Not all casinos have decided to add sports betting to their existing offering. Those that haven’t – even casinos which have been open for decades – are reporting a decline in their profits as a result. Illinois has already taken action to try to limit this effect – their state-specific sports betting laws prevent any out-of-state casinos starting new businesses within state lines for the next two years.
Illinois isn’t the only state which is attempting to stem the tide that’s flowing out from Nevada. Ohio, Louisiana, and Maryland have all relaxed compliance rules for their local casinos with a view to giving them a boost against the competition. It’s anticipated that the rapid expansion will eventually level out, giving all the companies involved in the industry a fairer player field, and a period of stability in which to catch up with the rapid pace of growth and change they’ve just experienced.
Although the rapid progression of the new betting trade might have produced turmoil and teething problems in some areas, what nobody can argue with is the scale of the financial windfall that’s come with the change in the law. The American Gaming Association – the largest body of its kind when it comes to the US casino trade – is reporting that $9.71bn has been added to local and state governments from gaming revenue – and that figure is incomplete. It doesn’t factor in any income or sales taxes which are paid by casinos – and the more casinos open, the higher that tax revue will be. When full figures become available for 2019, the amount of money put into local economies by sports betting is likely to be in excess of $20bn. That’s money that hasn’t had to be raised by increasing the level of tax on citizens or their properties – and as any politician will tell you, if you can do more for the local community without asking for a larger tax payment from them, you’re onto a vote winner.
One area which states have been slower to look into – largely because there are still questions of legality – is betting via the internet and mobile apps. Mobile gaming is a huge deal worldwide. In countries which allow them to be played, mobile slots generate billions of dollars in revenue each year. Because they’re able to offer more variety than a casino, mobile slots are frequently a more popular choice with players than slot cabinets in casinos. They’re especially popular with younger gamblers who are used to being able to do everything through their phones. There’s also another advantage – mobile slots don’t have to be turned off at a certain time, they might play mobile games on Late night casino and available wherever there’s an internet signal. You can play mobile slots at the top of a mountain if the signal is good. You can’t say that about most casino games.
What the future holds for mobile betting – be that mobile slots, mobile sports betting, or mobile roulette, is yet to be seen. Having angered some conservative pressure groups by allowing such a significant relaxation in gambling laws in 2018, lawmakers and politicians may be disinclined to rock the boat again with another major relaxation so soon. There’s probably a temptation there though – having seen what allowing sports betting to happen in specific locations has done for the public purse, someone in a government department has likely run the numbers to see what a completely legalized mobile betting industry would provide, and we imagine those numbers look fantastic.
America’s betting revolution may not have made winners of every gambler who’s taken advantage of the new law to place a stake on their favorite sports team, but it’s definitely made winners of everyone involved in accepting those bets. Where an industry is making money, it provides an opportunity for others to make money around them – and we think that has to be a good thing. Long may it continue.
