THE SPORTS-BETTING JUGGERNAUT

Wayne Perry of the Associated Press recently wrote an informative article about the growth of sports betting in the United States since the nation’s Supreme Court rendered a decision in 2018 that enabled states to legalize it.  Following are several key points reported by Perry:

Since the Supreme Court’s decision on May 14, 2018, 35 states and Washington D. C. have legalized sports betting.  It is already operational in 30 states with others, such as Ohio, close to operational. 

As of mid-May 2022, bettors in the United States have wagered $125 billion legally.  This is more than the net income for farmers in 2021 and exceeds the amount spent last year for pet food, supplies, and veterinary care.  The $125 billion does not include the amount bet illegally.

80% of sports bets are via mobile phones. 

In-game betting is the fastest growth segment of sports betting.

The overarching question for the horse racing industry is whether sports betting mostly cannibalizes or fosters pari-mutuel wagering.  Sportsbooks typically have a takeout rate of less than 10% of the betting handle, whereas the takeout in horse racing is much higher…and in some cases with exotic bets over twice as much.

Horse racing is experimenting with fixed-odds betting (an unfortunate nomenclature) to incorporate an attractive element of sports betting.  This and innovations like in-race wagering emulate proven advantages of sports betting.  However, the extent to which sports bettors can be attracted to pari-mutuel wagering is problematic, given the disparity in takeout percentages.  On premier race days like the Triple Crown events and Breeders’ Cup, people who do not normally bet on horse racing often partake.  Whether fixed-odds betting, in-race betting, and other elements of sports betting can bring in sports bettors on pedestrian race days is the predominant issue for horse racing.

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