Sports gambling remains big business in the states where it is legal.
Variety Intelligence Platform conducted an analysis of total wagers placed across legal states between January and May of 2023 and found the market had grown by 9% ($3.5 billion) year-over-year, to a total of $44.2 billion.
(Note the final 2023 figure will actually be greater than this, as Arizona reports one to two months behind other states, so there is only data available for January-April.)
This year is on track to be the most valuable mobile sports betting year yet, much as 2022 was before. Undoubtedly, this has been boosted by the likes of Kansas, Maryland, Ohio and Massachusetts now having legal online gambling versus this point last year, but it also shows that the public’s appetite for betting continues.
This is great news for national and local TV networks and streaming services with live sports rights. As VIP+ has previously noted, online betting is a key way to boost engagement with sports viewers, translating to more time spent watching televised games.
For an industry that is beginning to see mounting concern around the consumer costs of watching live sports — see Charter’s recent decision to offer cable packages including and excluding regional sports networks or ESPN’s “Project Flagship” to sell ESPN directly to consumers — anything that can keep fans engaged and watching will be welcomed.
(The additional revenue sports betting generates via sponsorships, partnerships and advertising is also something sports networks welcome.)
As VIP+ has previously explained, the $44 billion wagered in the first five months of 2023 is not the same as American consumers spending $44 billion on online sports betting. This figure includes both free bets as well as wagers won, which bettors then re-used on more bets.
In simple terms, if you placed a $10 bet with money, won $100 and then placed that $100 on more bets, that is $110 wagered but only $10 spent. If that $10 bet was complimentary from a sportsbook, then that is $110 wagered but nothing spent.
Most states that saw sports betting legal across the measured time period in 2022 and 2023 have seen an increase in the amount wagered this year. Yet some have had a considerable decline, suggesting sports betting is not a bulletproof recreational activity. New Jersey’s total is $390 million lower than in 2022, with Nevada seeing a $430 million reduction. Other states seeing nine-figure shortfalls are Michigan (-$212 million), Indiana (-$160 million) and Iowa (-$144 million).
In spite of that, sports betting can be expected to continue to grow into 2023 and beyond, especially once other states legalize it in a bid to raise state revenues without taxes, bringing the activity to more and more Americans. That will be welcome news to the sports networks, which could do with as much additional revenue as possible to offset the costs of sports rights.