PASPA’s Demise May Give Rise to $8B Sports Betting Industry by 2030Published December 3, 2018 by Brett C
The US sports betting industry is expected to grow rapidly over the next decade, generating an estimated $8 billion in revenue by 2030. These figures were compiled by leading sports betting consultancies in the US.
New Jersey Leads the Charge As Sports Betting Explodes Out Of the Gates
The state of New Jersey successfully petitioned the Supreme Court of the United States (SCOTUS) to overturn the Professional and Amateur Sports Protection Act (PASPA). After much deliberation, Supreme Court justices determined that PASPA indeed violated US states' rights to chart their own course vis-a-vis sports betting.
As a result of the Supreme Court decision, New Jersey legislators under Governor Phil D. Murphy moved swiftly to fast-track sports betting legislation in the Garden State. This was followed by similar moves in other US states which are now crafting legislation to pave the way for legalized sports betting.
Such is the gravity of sports betting in the US that it is slated to become the world's second-biggest gambling market. However, forecasters are cautioning that it may just grow to 33% of its potential within the next 12 years.
A report was commissioned by several leading gambling authorities and researchers, culminating in H2 Gambling Capital's US Sports Betting: The Road to 2030, in conjunction with ICE Sports Betting USA, and iGaming Business. Such is the pace of growth in the US that the sports betting industry is said to leapfrog from 9th position globally to 5th position within the next month.
US Market Set To Displace Italy and the UK
Within the next four years (2023), H2 Gambling Capital anticipates that the United States sports betting market will become even bigger than the world's premier sports betting markets – Italy and the United Kingdom. By that stage, the US will be firmly positioned at #3 in the world, and fit in snugly behind China in position #2 by 2030.
These predictions are part of a multi-year strategic vision which indicates that has US market is growing rapidly. There is a significant difference between the pace of growth for online casino gaming and that of online sports betting in the US. Clearly, bettors have a penchant for sports betting over casino gaming.
$196 Billion Illegally Wagered on Sports Betting in the US
The director of H2 Gambling Capital, David Henwood, believes that sports betting in the US exploded out of the blocks – a far cry from the sluggish start to online casino gaming. It is estimated that some $196 billion was illegally wagered on sports betting before 14 May 2018. Now that the market is fully regulated, there is tremendous upside potential for growth and development.
By 2024, the US will displace the UK, and this will leave Japan and China firmly in the US’ crosshairs. While expectations for dramatic growth are high, experts believe that only 33% of the estimated $25 billion will be generated by 2030. Depending on where sports betting options will be available, revenues will be affected accordingly. Some states may limit betting to racetracks, Racinos, and casinos, while others will allow online betting as well.
Among the many bugbears for the industry include limited mobile sports betting, a limited number of sports betting platforms, and high taxation. Additionally, it is expected that just 40% of US states will regulate sports betting by 2030. This will chip away at the $25 billion estimated revenues by 2030. Among the states likely to lead the charge are East and West Coast champions – New York and California.
California is expected to bring in $1.9 billion by 2030, New York $928.2 million according to the experts. States like Rhode Island face tax rates of 51% on gross revenues, while Nevada has a tax rate of 6.75%. High taxes eat away at profitability, and will also cause the $25 billion revenue figure to be whittled away.