Legal sports betting exploded to unprecedented size and prominence in 2023. In the process, there were casualties as the competitive environment changed significantly.
Top-line metrics for the sports betting business show the robust and expanding market that proponents dreamed of when the U.S. Supreme Court ruled in 2018 to allow states to enact their own laws in this area. was. The American Gaming Association predicts that total sports betting this year will exceed $100 billion. It has already posted $78.7 billion for the January-September period. In November, New York set a U.S. state record with a total monthly transaction volume of $2.1 billion.
Signs of rapid growth were easily seen at the corporate level as well. DraftKings is set to end the year with its stock up more than 220% on rapid revenue growth, while FanDuel, the US sports betting market leader, prepares to enter its own US stock market are doing.
Most dramatically, ESPN, the biggest brand in sports media, finally entered the space through a $2 billion deal with PENN Entertainment. His mid-November debut with ESPN Bet helped it break more state betting processing records in top markets like Pennsylvania and Massachusetts.
The Disney-PENN strategy for ESPN Bet, which began as a reskinned version of the previous Barstool Sportsbook and Casino app, is in many ways the seamless integration between sports media and betting seen on PENN’s theScore in Canada. I’m trying to reproduce. Read the content and build your betting slip.
An important early sign of the currently changing betting market occurred in Pennsylvania. There, PENN gained 6th place in the ranking and 3.8% market share in October with his Barstool app, but has since risen to 3rd place and 7% market share. Only on FanDuel and DraftKings – Next Month. Thanks in part to the rollout of ESPN Bet, PENN’s handle in the Keystone State more than doubled from $32.3 million in October to $66.8 million in November.
Similar moves are emerging in other top markets where ESPN Bet operates, and are part of PENN’s efforts to target a much broader consumer base than just betting enthusiasts. “One of the things we’ve talked about a lot is we want to reach sports fans, not just sports bettors,” PENN CEO Jay Snowden said at the ESPN Edge conference in November.
changing competition
ESPN and PENN have a very ambitious goal of achieving 20% market share by 2027, which is a huge leap forward from the duopoly of FanDuel and DraftKings, which currently control more than 70% of the total market. It will erode the state. (Including BetMGM and Caesars, that group’s total market share is nearly 90%.)
As a result, several smaller entities have exited the sports betting business entirely, reduced their presence, or been acquired by other operators. Fox Bet shut down in August, followed by Malta-based operator Unibet’s decision to exit the North American market as well in November, and WynnBet to focus on a few key states. It has significantly reduced its visibility at the national level. Such a move would follow the same path as the demise of MaximBet, Fubo Sportsbook and Churchill Downs in 2022.
Meanwhile, sports merchandising giant Fanatics completed a $225 million deal to acquire PointsBet’s U.S. operations this summer, making significant progress in its sports betting ambitions. The arrival of Michael Rubin’s company, in addition to the similarly deep-pocketed ESPN Bet, is reshaping the American sports betting market by squeezing out even smaller players.
“In many states, we’re really seeing the market start to center around a group of top-level players, including DraftKings, FanDuel, BetMGM, Caesars, ESPN Bet, Fanatics, and probably Bet365.” says sports betting expert Dustin Gawker.says the consultant and longtime games journalist. front office sports. “How do so many other companies reach 5% market share? What is their value proposition? How do they actually differentiate themselves? Resources to win over consumers Are there any? So I think we’re going to see more players drop out.”
The slowing pace of state expansion is also contributing to market consolidation. North Carolina legalized it in June, ushering it into 2023, but no official betting start date has been set yet, with Vermont set to start sports betting in January. Meanwhile, the most populous states, California and Texas, the whales of the industry, have so far shown staunch resistance to legalization.
Mark Cuban’s recent deal to sell a majority stake in the Dallas Mavericks, in part Specifically, it is based on the possibility of constructing a large-scale casino. and the arena complex in Dallas.
“Over the past five years, new state launches have been a big part of sports betting’s overall growth trajectory,” Gawker said. “We’re going to see less of that going forward, and growth will be more gradual until we see what’s going on in California and Texas.”
problematic behavior
The explosion in sports betting in the United States has coincided with an increase in players and coaches breaking league and team rules. In October, the NHL suspended Ottawa Senators forward Shane Pinto for a season and a half for “activities related to sports betting,” making it the first gambling-related suspension in the modern era. Meanwhile, after suspending 10 players for gambling violations this year, the NFL amended its rules in September to create harsher penalties for betting on games and gambling at team facilities. tried to protect the integrity of
In the area of college sports, Iowa State heavily criticized the Iowa and Iowa State University football and baseball programs, ultimately securing guilty pleas from five players on underage gambling charges. But it wasn’t just the players who had problems in this area. In May, the University of Alabama fired baseball coach Brad Bohannon for suspicious gambling activity, which also led to the resignation of Cincinnati baseball coach Scott Googins.
The issue has become so important to the NCAA that new president Charlie Baker began lobbying in October to change state law to protect student-athletes from harassment and coercion related to sports betting. These political efforts have received less public attention and attention than institutional maneuvers around name, image, and likeness (NIL) rules. But given that the U.S. sports betting market is nearly 100 times the size of the NIL business, the NCAA’s efforts here could be far more impactful.
This is just one of the 2024 sports betting subplots that currently leaves the burgeoning industry with more questions than answers.