It was already an accepted fact that legalized sports gambling in the US would bring significant revenue to states. Estimates over the years have put the value of the offshore sports gambling segment at around $150 billion, although it isn’t possible to calculate an actual figure. Still, now that states have been legalizing sports gambling across the country and more are coming, these are depleting the revenue sources once controlled by offshore operators. As a result, the legal sports gambling market in the US is growing rapidly and a new report by CFRA Research confirms what most already knew. Legalized US sports gambling is an 11-figure industry.
Billions of Dollars Waiting to Be Won
Andrew Tam and Tuna Amobi with CFRA Research have sent out an update to clients, providing their estimates for where legal sports gambling and iGaming are headed in the US. Overall, they expect the two gaming segments to be worth at least $25 billion by 2030, but add that it could be worth as much as $42 billion. Much of that variance and result is predicated on the continued expansion of legalized sports gambling and iGaming in the country, with at least 70% of Americans able to place sports bets within seven years.
For the combined sports gambling and iGaming segments, the analysts predict compound annual growth rates (CAGR) of between 23%-30% over the next ten years. It’s likely to be at the high end of the range, driven by an increase in participation that outpaces the increase of legalization. There are now around 30 states that have legalized sports gambling and a handful of others that are putting the final details on their own frameworks. These will launch within the next 12-24 months, rapidly expanding the overall sports gambling market in the US.
In addition to sports gambling growth, iGaming is picking up, as well. Previously, online casinos were extremely limited in the US, but the segment is adding new jurisdictions on a regular basis. iGaming is likely to see an explosion over the next couple of years, as well, since it now appears as though the Department of Justice has failed on using the Federal Wire Act to prevent online gaming.
More Industry Changes on the Way
It’s only been a couple of years since the US Supreme Court told lawmakers and sports organizations they were wrong for having created PASPA, the legislation that prevented states from offering sports gambling. The reversal of that law saw an immediate response by states looking to capitalize on the revenue potential of the activity, and COVID-19 has served as an impetus for other states to join them. However, still being a nascent market, there is a lot of growth and structuring still to be seen.
New players are constantly looking for a way to enter the US gaming market and others are seeking ways to create strategic acquisitions. Across all sports leagues, teams – and even the leagues themselves – are creating partnerships that are putting sportsbooks on the front lines, providing greater exposure to sports gambling. States that previously prohibited wagers on college sports are now rethinking that ban, which will also have an impact on the overall market. The conclusion of the Wire Act debate, the NCAA’s loss of a Supreme Court fight to prevent Name, Image and Likeness (NIL) agreements on the part of college athletes and the continued rollout of new gaming options are going to exponentially increase the revenue generated from both sports gambling and iGaming. Those who don’t embrace it are simply going to miss out.