What do you think? Leave a respectful comment.

Go big or go home: America’s multi-billion dollar sports betting business

Super Bowl Sunday is the biggest sporting -- and betting -- event of the year. Despite the pandemic, bookkeepers are expecting wagers worth more than $4 billion this year. Since its expansion outside Nevada in 2018, the legal betting industry has ballooned, with New Jersey emerging as the biggest market in the country. Hari Sreenivasan reports on why, the odds are, the industry will keep growing.

Read the Full Transcript

  • Hari Sreenivasan:

    It's Super Bowl weekend, which means that in addition to two teams playing for the NFL championship, it's also the biggest betting event of the year. 23 million people will wager an estimated $4.3 billion dollars on the game according to industry estimates.

    Betting has always been part of sports – legal or not, but since the expansion of legal sports betting outside of Nevada in 2018. It's suddenly much more visible.

    Just over the Hudson River from New York City, at the Fanduel Sportsbook at the Meadowlands in New Jersey, capacity is limited to 35 percent as a COVID precaution. But that doesn't mean that it's not busy.

  • Andrew Kleiman:

    We've done our best to create an environment where they're able to at least feel comfortable being in here and be socially distanced so I don't think the excitement is any different. I think, if anything, the excitement is more this year than it was last year.

  • Hari Sreenivasan:

    Andrew Kleiman is the Senior Director of Operations for the sportsbook. It is the largest sports betting operation in the country, and part of the dramatic growth of the industry in New Jersey since becoming legal.

    Last year, New Jersey sportsbooks took in nearly $400 million in revenue. It was nearly $100 million more than 2019, despite the pandemic. And it generated more than $50 million in state taxes.

  • Andrew Kleiman:

    When we were able to open up, it almost was like a perfect storm where all the sports came back, and people actually wagered more than they did last year. So needless to say, it was a really good year for us.

  • Hari Sreenivasan:

    The growth has also been driven by the fact that in New Jersey, you don't have to physically be here, you can just use your phone. In fact, more than 90 percent of the wagers in New Jersey are done online.

    It's part of a huge change since New Jersey led the effort nationally to legalize sports gambling outside of Nevada. As Newshour Weekend reported back in 2015, boosters of sports betting in the Garden State had been pushing to legalize the practice for years. In central New Jersey one racetrack even preemptively built out this space in anticipation of the rules changing.

    In May of 2018, the Supreme Court struck down a 1992 law that had prohibited it. and within months, New Jersey Governor Phil Murphy was placing a legal bet in that same sports book that had been built years earlier. Today, 20 states and Washington D.C. have legalized sports gambling in some form, with another 19 either considering legislation or working on regulations to actually start operations.

  • Chris Grove:

    We're unlikely to see another expansion of gambling that occurs this rapidly for a generation, if not more.

  • Hari Sreenivasan:

    Chris Grove is a partner at Eilers and Kreijek Gaming, an independent research firm that follows the industry.

  • Chris Grove:

    I think that it's certainly possible that we could see the number of states where sports betting is available crest over 30 by the end of the year. Some of that increased interest in state legislatures does come from the budgetary pressures brought about by the global pandemic. But to be honest, much of that momentum was already existing in state capitals.

  • Hari Sreenivasan:

    New Jersey, is currently the biggest market in the country with more than $6 billion in wagers in 2020. But Grove says this will change as the industry matures and more states legalize sports betting.

  • Chris Grove:

    It is a temporary crown, unfortunately, for the good folks in the Garden State. Generally speaking, with some exceptions on the margins, the largest states from a sports betting revenue perspective are going to be the states with the largest populations.

  • Hari Sreenivasan:

    Grove also says that the growth has come as media and sports leagues themselves have embraced gambling. Both ESPN and FS1 feature daily shows devoted to sports betting. Information on betting odds are now displayed on the ticker on networks like ESPN, and media companies and teams have official gambling partners, and feature betting content during games.

  • NBA Halftime show:

    Right now the Nets are underdogs, getting six and a half points.

  • Chris Grove:

    I think you're also going to see those partnerships continue to deepen and you are going to see increased integrations, whether it's some of the more subtle things, or more all-in integrations like like custom blocks of content that are gambling first and sports second. I don't think it's overstating it to use the word ubiquitous. I think you are going to see that kind of ubiquitous integration.

  • Hari Sreenivasan:

    Grove believes it is in this area where we could see new regulation in the future.

  • Chris Grove:

    I think it's going to be an interesting dialog between sports teams, leagues, betting operators, consumers and, of course, regulators who do have a history in the US of weighing in on what kind of advertising, in what context is appropriate.

  • Hari Sreenivasan:

    Back in New Jersey, despite the availability of online betting, Andrew Kleiman says many people still prefer to place bets in person, which is the only way to use just cash.

    While there's a lot of focus on who will win the game, Kleiman says keep an eye on the pregame coin toss: it's one of the most popular bets not related to the game's outcome..

  • Andrew Kleiman:

    It's a 50-50 opportunity. And it's just one of those things that you sit there and you just hope for the best, but you also want your customers to win too.

  • Hari Sreenivasan:

    And in case you're wondering, as of yesterday, the heavy favorite in terms of money wagered at least, was tails.

Listen to this Segment