Industry Analysis: Sports Betting
In 2017, the legal sports-betting industry was valued at $270 million in the United States and is expected to grow further over the next five years. The United States Supreme Court identified the Professional and Amateur Sports Protection Act (PASPA) to be unconstitutional and lifted the federal ban on this market, in May 2018. Several states have begun drafting bills to legalize sports wagering. Some major sports betting players in the United States are Caesars Entertainment Corporation, Las Vegas Sands Corporation, and Scientific Games.
Sports Betting Industry — United States
According to a report published by Eilers & Krejcik Gaming, LLC, the legal sports betting industry in the United States was estimated at $270 million in the year 2017. This industry is expected to continue growing at an accelerated pace due to various drivers that include the steady growth of the economy, increased adoption of digital devices, lenient government regulations, and growth in internet penetration. Factors such as sports betting regulations and high tax rates can hinder the growth of the sports betting market in some states. Key trends of this industry include mobile betting, digitalization, growing penetration of debit and credit card, and a rise in betting on e-sports.
The federal ban that was placed on sports betting was lifted by the Supreme Court in May 2018, after the PASPA was identified to be unconstitutional. With the ban lifted, many states such as New York, Ohio, Oklahoma, Minnesota, Michigan, Indiana, Kentucky, Kansas, Illinois, Iowa, South Carolina, California, Missouri, Massachusetts, Maryland, Mississippi, Connecticut, and Louisiana have started making new regulations to legalize sports betting. It has been estimated that over the next five years, 32 states in the country will allow sports betting and will result in generating an annual revenue of $6.03 billion. The report also reveals that if all 50 states legalized sports betting, the industry would generate anywhere between $7.1 billion to $15.8 billion, annually.
Key Players of the Industry
In order to identify some major players in the sports betting market, in the United States, we began our search by looking into industry-specific websites such as USBets and Market Watch; media websites such as Forbes, PR Newswire, and GlobeNewswire; and industry research websites such as Research and Markets. After an extensive search through these channels, we were able to identify three major players of the industry ranked in terms of their annual revenue -
- Las Vegas Sands Corporation has an estimated annual revenue of $13.73 billion.
- Caesars Entertainment Corporation has an estimated annual revenue of $8.391 billion.
- Scientific Games has an estimated annual revenue of $3.083 billion.
It has been found that all three organizations are major competitors of MGM Resorts.
Key player #1: Las Vegas Sands Corporation
Annual revenue: $13.73 billion
Las Vegas Sands is an entertainment provider and developer of integrated resorts that consist of best-in-class gaming, dining, luxury hotels, entertainment, and various other leisure amenities. Some of the major properties operated by Las Vegas Sands are Venetian Las Vegas Hotel, Resort & Casino, The Venetian Macao, Sands Bethlehem, The Palazzo, and Marina Bay Sands. The company claims to have an exceptional record in developing some of the world’s largest leisure and business properties. The company is a pioneer in the development and operation of Meetings, Incentive, Convention and Exhibition (MICE) facilities in regard to its MICE-specific Integrated Resort. This resort is considered to be an “industry-leading and extremely successful product” of Las Vegas Sands.
Key Player #2: Caesars Entertainment Corporation
Annual revenue: $8.391 billion
Caesars Entertainment Corporation is a casino-entertainment provider and operates over 50 casinos across the United States and the United Kingdom. Rio casinos, Harrah’s Horseshoe, Paris Las Vegas, Caesars Palace, and Planet Hollywood are some of its major properties. The company’s operations consist of gaming establishments, hotels, and riverboat casinos. Over the years, Caesars has grown into an entertainment empire with new expansions, resorts, and acquisitions. Caesars Entertainment Corporation also owns the World Series of Poker tournaments. According to a press release, Caesars Entertainment Corporation claims to be “the leader in legalized gaming” in the United States. Caesars began taking mobile sports bets last year (2018) through the Caesars Casino & Sports app.
Key Player #3: Scientific Games
Annual revenue: $3.083 billion
Scientific Games is a leading developer and provider of technology-based services and products in interactive gaming, worldwide gaming, and lottery industries. The company specializes in game content and gaming machines, table game services and products, casino-management systems, lottery systems, interactive gaming that includes sports betting technology, social casino solutions, and lottery services and content. Scientific Games is known to access innovative technologies through equity investments and strategic acquisitions. In the year 2018, Scientific Games partnered with Caesars Entertainment Corporation to power the company’s Caesars Casinos & Sports app via its OpenBet technology.
Important Industry Happenings
With the federal ban on sports betting lifted by the United States Supreme Court in 2018, there have been a number of milestones met throughout that year with major debuts, mergers and acquisitions, partnerships, and openings. The following are some key highlights that took place in the industry in 2018 -
- Scientific Games announced its acquisition of NYX in January 2018.
- In May 2018, the Supreme Court announced its decision about the PASPA being unconstitutional. Several states were actively pushing to keep federal laws out of sports wagering. That same month, Paddy Power Betfair acquired FanDuel.
- In September 2018, Harrah’s Philadelphia was third in line to apply for a sports betting certificate in Pennsylvania, after Parx Casino and Hollywood Casino.
- In October 2018, Scientific Games acquired Don Best Sports with the aim of expanding their platform portfolio to include Don Best’s expertise and trading platform. That same month, Harrah’s, Sugarhouse, and Rivers casinos were consented for PA sports betting certificates.
- In November 2018, Rhode Island became the first state in New England to legalize sports betting. That same month, Caesars Entertainment and MGM became the founding members of the Sports Wagering Integrity Monitoring Association. NBA announced its first betting-data partnership with Genius Sports and Sportradar.
- In December 2018, a new sports betting bill was drafted which provides the United States Attorney General with purchase of data. Washington DC, Kentucky, New York, South Carolina, Missouri, Virginia, and Tennessee have drafted pre-filed bills to legalize sports betting in their states. There has also been a report that indicated the sports betting handle in New Jersey reached $330 million that month.