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State of the Union: US Sports Betting Update – March Madness set to Boost Legal Sportsbooks

The US is now firmly in the grip of March Madness and college basketball fans are expected to wager $8.5 billion on the tournament. That estimate comes from the American Gaming Association, which surveyed 11,002 adults this month before drawing conclusions based on the results. It declared that Americans will wager $4.6 billion on brackets, and a further $3.9 billion will go on traditional sports bets. That would see the NCAA Division 1 college basketball tournament eclipse the Super Bowl and retain its status as one of the most important betting events in world sport.

“During this year’s tournament – the first in post-PASPA America – sports fans are expected to bet 40% more than they did on this year’s Super Bowl,” said Bill Miller, the AGA’s president and chief executive. “Unlike any other sporting event in the country, March Madness attracts millions who fill out brackets, make casual bets with friends or wager at a legal sportsbook, which Americans can now do more than ever before.”

The AGA estimates that 149 million Americans will bet on brackets, which simply involves guessing in advance who will win each game. You select which 32 teams you think will prevail in Round 1 and this leaves you with 16 games in Round 2. You keep guessing until you predict which teams will compete in the Sweet 16, the Elite 8, the Final 4 and then the deciding game, before choosing who you think will win the tournament. Those that come closest to predicting correctly can win big. Duke is the most popular choice to win, followed by Gonzaga, North Carolina, Kentucky, Virginia and Michigan.

Revenue Boost Expected

A much smaller group of 18 million people is expected to place the $3.9 billion in traditional sports bets on March Madness. These include spreads, totals, moneyline and so on. The AGA estimates that 4.1 million people will place a bet at a legal sportsbook, either online or in person. It is the first time that legal sports betting has been popular on this tournament outside of Nevada, with New Jersey, Pennsylvania, Delaware, Rhode Island, West Virginia and New Mexico also taking wagers on it.

Operators in Mississippi are expecting a boost to handle and revenues while the tournament takes place. Sportsbooks are expecting high turnouts, as Ole Miss and Mississippi State both feature in March Madness this year. “Madness has always lived up to the excitement, whether it’s filling out a bracket or watching the game because it is such a big event across the country,” said Jay McDaniel of the Mississippi Gaming Commission. “We’re expecting a boost not only in the gaming revenues, but also visits to our properties. There is excitement because it is not just a one-day event like the Super Bowl, it’s multiple weeks [the tournament runs until April 8]. We will be watching revenue numbers to see how they do, and just as a fan of college basketball, I will be watching because I want our state teams to do well.”

Fighting Against Off-Shore Sites

The AGA predicts that a further 2.4 million will bet illegally with a local bookie, while 5.2 million will turn to illegal, off-shore sites and the rest will simply place bets with their friends. “These results indicate there’s still work to do to eradicate the vast illegal sports betting market in this country, and we’re committed to ensuring sound policies are in place to protect consumers, like the 47 million Americans who will bet on March Madness,” said Miller.

Yet the AGA reported that more than £5.9 billion has been wagered on sports in the eight states that have legalized sports betting since PASPA was struck down, so operators appear to be doing a decent job of seizing market share from off-shore books. Several states are now poised to join the party. New Hampshire is making a concerted push to become the first in 2019 to authorize legal sports wagering. H B 480 passed through the House of Representatives this week by a vote of 269-82.

Sports betting is already well underway in Rhode Island and Connecticut is heading towards legalization, so the onus is on New Hampshire to follow suit if it is to avoid losing out in New England. Governor Chris Sununu has included $10 million in revenue from sports betting in his 2019-20 budget, so he is clearly confident it will pass. H B 480 would impose a limit of 10 retail sportsbooks, while giving the New Hampshire Lottery Commission power to administer sports betting in-person and online.

Iowa and Illinois March Forward

Iowa is also edging toward legalizing sports betting after H 648 began to gain traction this week. A compromise advanced the bill in the House and author Rep. Bobby Kaufmann said: “The bottom line is this thing isn’t passing on the House floor without Democrat votes, so we have to make concessions and we’re doing that.”

Neighbouring Illinois is also motoring towards a regulated sports betting industry. Governor J.B. Pritzker has earmarked an ambitious $200 million from sports betting revenue in his upcoming fiscal budget and he is therefore keen to see it begin as soon as possible. There are many hurdles to overcome before that dream turns into reality, but the lawmaker leading the charge towards legalization has now laid out a potential framework. Rep. Mike Zalewski, the chairman of the House Committee on Finance and Revenue, has created HB 3308, which has four amendments for his legislative colleagues to choose from.

They are: the New Jersey model, charging a $10 million up-front licensing fee, plus 15% tax on brick and mortar sportsbooks and 20% for online books, where operators receive two skins at $1 million apiece; a Mississippi model, with the same fees but with 10 online operators tethered to brick and mortar sportsbooks; the professional sports leagues proposal, whereby the leagues gain a 0.25% cut on total handle, plus a revenue tax of 12.5% would be charged; and a lottery oversight, which involves the Lottery board issuing one central system provider with a license, something that has been rolled out in smaller states.

Zelewski said he has included a number of options to gauge how comfortable his legislative colleagues are with sports wagering. “Any gaming bill is difficult to get through, and we’re probably going to need the governor’s help to pass something like this,” he added. “But I’m also confident my colleagues are interested in this topic and want to see the state benefit from it.”

Author: Kristian

Kristian heads up the content and SEO team at Digital Fuel having worked in digital marketing for ten years. He’s as passionate about creative content as he is about Brighton & Hove Albion FC and when he’s not following football he’s writing about Brighton’s bustling pub scene.

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