It’s possible that more than a handful of lawmakers are now wishing they had listened to common sense and not certain backers when developing legislation for online and mobile sports gambling. COVID-19 has proven that iGaming and mobile gambling options are able to provide a much-needed source of revenue for state and local governments, where the activity is authorized, while the retail gambling market continues to drop. Based on recent analysis by H2 Gambling Capital, particularly in the US, legalizing mobile gambling alternatives has proven to be a lifesaver for government budgets.
During the recently-held Sports Betting USA Conference, H2 Director David Henwood shared some insights into how mobile wagers are helping to shore up an otherwise unstable industry. Overall, global gambling revenue has dropped by 26% this year, with retail gambling taking a 39% hit. To put this into perspective, these figures represent the levels, in terms of gross gambling revenue (GGR), that were seen a decade ago.
However, online gambling and iGaming only suffered a decline of 7% during the same time, and will account for 20% of all gambling activity by year’s end. Henwood explains, “The good news is we believe [the gambling industry] will bounce back, primarily because of the phenomenal rise in the percentage share of online, which in the space of a few months has jumped from 13% of all gambling revenues [pre-COVID] to 19% – possibly reaching 20% by the end of the year.” This is putting iGaming GGR on track to reach $1.4 billion, according to H2’s analysis.
Sports gambling has always been seen as a means to attract substantially greater amounts of revenue and the states that have embraced the activity are finding out that there’s merit to that argument. There are now about 19 states that have regulated sports gambling markets, with several more to be added within the next couple of years after they recently approved legislation for the activity. In addition, more states will join, and there could be as many as 40 included within two to three years.
Of those that have already embraced sports gambling, only four didn’t authorize an online component, and they are learning the errors they made. This September, with the NBA playoffs looming and the NFL and college football seasons getting underway, sports gambling operators in the US recorded an aggregate handle of $2.9 billion. That represents a year-on-year increase of 75% and, although sports gambling GGR took a 3% hit as the average hold increased, there is still a lot more growth to come.
So much growth, in fact, that the $1.4 billion in GGR expected for 2020 is forecast to double by the end of next year. After that, there’s nothing but more growth to come, with sports gambling GGR conservatively reaching around $10 billion within ten years. A large portion of that will be recorded by online operations, and those states that don’t authorize the segment will only be able to watch as gamblers continue to find alternatives to brick-and-mortar solutions.