H2: US TO BECOME $8.4BN SPORTS BETTING MARKET BY 2030
The regulated US sports betting market is expected to explode in the coming years, with an exclusive new report from H2 Gambling Capital estimating that gross win will soar to $8.42bn across 32 states by 2030.
‘US sports betting – One year on,’ produced by H2 for iGaming Business North America, looks at the development of the market in the year since the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA).
H2 estimates that in the 12 months since PASPA was consigned to the past in May 2018, around $9bn in legal bets have been placed. At an average hold margin of 6.7%, this suggests operators generated gross win of $600m, suggesting that the US market doubled over the 12 month period.
This growth looks set to continue. H2 believes that market gross win will treble to about $1.98bn. By 2024, it will grow tenfold to $6.02bn, before reaching $8.42bn by 2030.
As more states regulate and the player base grows, total handle is expected to soar from the $9bn wagered in the year since PASPA’s repeal to beyond $50bn by 2023. This upward trajectory will continue through to 2030, when total stakes are likely to surpass $80bn.
This, in turn, will significantly boost state tax revenue from legal wagering. By 2020 H2 expects states to generate $242m from sports betting taxes, with the 2030 take expected to be in the region of $1bn.
However, H2 notes, this is a conservative estimate, based on the assumption that regulated offerings will still have to compete against offshore competitors and prohibitively high tax rates in certain states.
This illegal market will not be disappearing for at least a decade, with legal wagering only accounting for 4% of the offshore betting market’s gross win of $11.2bn to date. Indeed H2 notes that very few other regulated territories have launched in the shadow of such a large and entrenched illegal market.
It argues that this can only be tackled through close cooperation between regulators, operators and sports leagues to effectively channel players to legal offerings. Even with such efforts, however, it does not expect the legal market to outgrow its offshore counterpart until 2030 at the earliest.