19 states have passed sports betting legislation (14 are live). By the end of 2020, Jake Williams, VP of Legal and Regulatory Affairs, Sportradar U.S. (the leading data supplier in the domestic betting market), expects that figure to climb into “the mid-twenties.” Surprisingly, at least to those who are aware that +/- 80% of all sports betting takes place on mobile devices, only +/- 68% of the states that have passed legislation to date included online or mobile wagering in the bill. Those who failed to do so are leaving revenues on the table.
Howie Long-Short: One reason that such a large percentage of states are passing legislation without an online or mobile component is in the U.S. “gaming [licenses] are tied to physical locations.” The overwhelming desire to “bring people into those facilities” has resulted in several states deciding they would only permit sportsbooks within brick and mortar properties.
“The industry has quickly learned [a casino] isn’t going to bring that many more people to the facility [with the presence of a sportsbook].” Instead, Williams says local gaming operators should consider lobbying “to introduce new online and mobile products, [which would allow them to] generate revenues and then try to drive those new customers to a physical location. The audience who bets online or through a mobile app isn’t necessarily interested in going to a casino or retail sportsbook. [Operators] can capture far more of the market [if they have an online and mobile options available].”
It’s important to note that even in states with online and mobile sports betting “there is a spectrum of how successful the roll-out can or will be.” States that fail to support an open and competitive marketplace, limit the locations where mobile bets can be placed (see: geo-fencing) or require in-person registration are going to generate less revenue. New Jersey – which has 20+ skins and is generating +/- 88% of its sports betting revenues through mobile applications – is considered the model to follow.
The one mistake New Jersey made was preventing bettors from wagering on collegiate teams located in the state. Williams says “it’s not better from an integrity perspective, it just forces those who want to bet on Seton Hall or Rutgers to drive to PA, bet with their local bookie or bet off-shore.” The rigidness of the legislation prevents state regulators from correcting the wrong.
As the U.S. sports betting industry matures, in-play betting will become more prominent. With that transition will come an increase in “transaction volume” and in the amounts wagered. Williams expects – based on international trends and the direction the world is heading – that “80% of all-bets will [eventually] be in-play.” How soon remains to be seen (though, a decade seems reasonable), with most companies currently focused on offering core products that their customers are familiar with. That’s because “some of the platforms that the online or mobile products were built on were developed many years ago. They weren’t designed to handle the dynamic and time sensitive requirements of the U.S. market in 2020, which for a large operator means launching multiple sportsbooks in multiple states, keeping the product on the cutting edge of innovation (because there is stiff competition) and doing it without knowing [what is coming down the pike].”
Software and bandwidth concerns aside, Williams believes that the industry needs to invest in educating the public that in-play betting is a possibility for it to become more prominent. To that end, Sportradar is meeting with lawmakers and regulators across the country to ensure that they understand the entire anatomy of sports betting, including the potential of in-play (along with how data is used and integrity monitoring). “Even though there has been sports betting in Nevada for a while, most people don’t fully understand that they can bet during the game. Once that becomes part of the culture, in-game betting will take off and that is when teams and leagues will begin to achieve their goals related to driving engagement.” SBJ recently noted that online sports betting has yet to impact the NFL’s television ratings.
Fan Marino: If sports betting is operational in 25+ states come early 2021, Williams indicated that last Sunday’s Super Bowl would be the last without national commercials for gaming operators. “You are going to be hard pressed to find a CMO [of a multi-state operator] who wouldn’t be very interested in [a Super Bowl commercial]. Certainly there are companies with big budgets, that want to make some form of a splash. I don’t think it is crazy to think it could occur [next year].”
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