Supreme Court opens up sports betting in US

May 17, 2018
3 min read

On May 14th, the Supreme Court struck down the Professional and Amateur Sports Protection Act: a piece of legislation from 1992 that essentially banned commercial sports betting in most states. With this decision, the court has opened the door to legalizing commercial sports betting across the country.

The case in question (Murphy v National Collegiate Athletic Association) came about after the citizens of New Jersey voted to amend their constitution to legalize sports betting in 2011. Three years later, the New Jersey Legislature repealed the law against sports betting. Since the court sided with the state, state legislatures can now write laws establishing the rules and regulations for legalized sports betting.

The implications

The most immediate impact of this week’s court decision is the freedom for states to sanction sports betting at casinos and racetracks across the country. This will likely be a profitable additional revenue source for established betting organizations. Following the ruling, Caesars Entertainment’s stock price rose 6%, while fantasy sports companies DraftKings and FanDuel announced developments to allow sports wagers.

Hundreds of millions of dollars in potential revenue is now on the table for gambling organizations outside of Las Vegas. Since that revenue can now be taxed, it would not be surprising to see states get the ball rolling to legalize sports betting. Online betting services will also likely boom, especially companies that emphasize the mobile experience. Smartphone and tablet ownership rose 16% and 27% respectively from 2015 to 2017, according to Mintel research on digital trends. With the ability to place sports bets on their phones, the distance between an idea and actually placing a bet is much smaller. Online sports betting is likely going to be a key component to the US gambling industry.

The consumer

Major league sports organizations such as the NBA, NCAA, and NFL have been in favor of federal prohibition, claiming that legalized sports betting could diminish the integrity of sporting events. However, this could be an opportunity to get more people outside of regular viewers invested in different sporting events. Mintel research on US sports fans shows that 43% of adults are avid fans of one sport. This share is bolstered heavily by professional and college football fans. Still, legalized sports betting will likely attract more active interest in established sports organizations (MLB, NHL) as well as growing markets (eSports).

Sports broadcasters such as ESPN, NBC, and Fox will also likely reap the rewards of legalized sports betting. Even avid fans tend to be distracted while watching sporting events, primarily by what is happening on their smartphone. Broadcasters can enhance the mobile experience for sports bettors on their apps, tracking live updates of other events while showing spreads or fixed odds for different matches.

For more information, be on the lookout for an upcoming Gambling and Sports Betting Report set to publish in August 2018.

John Poelking
John Poelking

John Poelking is a Gaming Analyst at Mintel. His passion for live entertainment, movies, television, video games, technology and travel informs his sector knowledge.

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