Is Sports Betting Losing the Race to Gambling Online?

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For a long time, Nevada was the single US state where conventional sports betting was permissible. Since the US Supreme Court ruled in favor of New Jersey’s battle to introduce sports betting in 2018, however, the industry has been in the ascendancy. The number of states offering legalized sports betting now stands at 21, with more expected to join the fold. 

The positive effects on the industry are already being felt, and they’re expected to skyrocket in the coming years. According to Gambling Compliance, the market value will reach a staggering $8.1 billion in revenues by 2024. With some of the biggest sports leagues on the planet calling the United States home, it’s not exactly a surprising prediction.

Online casino games (we’re talking poker, slots, and traditional table games), on the other hand, are a little trickier to assess. There are only a handful of states that allow it, with land-based casinos still raking in the majority of the profits. The industry’s potential is massive, but will states legalize its existence? 

However, there’s a huge BUT in the assessment of the trajectory of both industries: COVID-19. In this editorial, we’ll consider whether sports betting is taking a hit it can’t recover from, or if it’ll come back with a vengeance once restrictions lift. Or, will gambling online take center stage once the dust settles? The ultimate question: is sports betting going to lose the race to online casino gambling? 

The COVID-19 Question 

We, of course, can’t assess this question with any form of credibility without considering the effects of coronavirus on gambling. In the short-term, the sports betting industry is suffering. It’s no surprise, with most global sporting events being canceled. We just endured a March without March Madness, Euro 2020 won’t take place till 2021, and Tokyo has announced it has postponed the Olympics. And let’s not talk MLB, NBA, or NFL; the blanket cancellations are perhaps a little too painful to discuss!

The situation with sports betting and land-based casinos in this country is so uncertain right now that the best online casinos in the USA have taken notice; they’ve taken measures to recover some of that lost revenue. These are some of their mitigation strategies:

  • Improved Sign-Up Bonuses. It’s a good time to sign up as a new customer, with casinos offering more generous sign-up bonuses across the board.
  • Extending online sports betting. Did you know that you can get in on virtual sports? You can bet on simulations of different sports, kind of like watching a CPU vs CPU battle of the LA Lakers against the Boston Celtics. Hey, it beats putting a bet on the Belarussian football league (one of the only ones still running today)!
  • Improving overall customer experience. Demand for online casinos has gone up in the short-term. Stats are hard to find, but Israeli firm Optimove has reported an increase of 43% in online poker games, for example. Online casino companies are on the whole improving server performance, increasing the number of games available, and attempting to offer an improved customer experience to keep players coming back post-lockdown.

casino gambling

Companies are noticing trends of customers trading their sports betting budget for online casino chips, with poker, virtual traditional table games, and slots seeing a short-term surge in usage. Firms who are in the unfortunate position of operating in a state where sports betting is allowed but online casinos are not, are in a more precarious position. Will they begin to put more pressure on state legislators as a result?

State Revenue Loss = Sports Betting Gain?? 

Analysts believe that while sports betting has taken a hit in the short term, it may have a net positive effect in 2021 and beyond. Casey Clark, currently the senior VP of the American Gaming Association, thinks that COVID-19 will actually accelerate a burgeoning growth of the industry.

While counterintuitive at first glance, the reasoning does make sense. The existing crisis is leading to a shortfall in state budgets, with revenues falling sharply across the board. The existing gaming industry is also experiencing a contraction. States will be looking to expand their revenue options, and easing restrictions on gambling may be an attractive option.

The budget issue is one we’ve previously discussed on The Sports Bank; we think Cuomo may hit the rewind button on some of his statements about online gambling and his reticence to allow it.

Uncertain Future

Unless you own a crystal ball that actually works, no one knows what the future is going to look like. Some predict a sharp second wave of COVID-19 infections, others want the lockdown to end yesterday, while economic experts vary between a V-shaped recession and the return of the Great Depression.

This uncertainty reverberates throughout every industry and business, including the gambling industry. Sports is taking a huge hit; that’s clear. However, based on 2019’s figures, the long-term future of sports betting nevertheless looks positive. We’re pretty sure that once restrictions lift and sporting events are back to some form of normality, gamblers will once again put a wager on their favorite team(s).

Despite cancellations, sports have an advantage in the United States due to existing state regulations. Even though online casinos are growing, the legal side is stifling the industry’s potential. If states start easing restrictions on online casinos as a result of COVID-19, however, we can expect a concurrent growth of both industries. 

 

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