The Monday Line: Is Offshore Bigger Than Legal Sports Betting?
Here’s today’s quick rundown in the world of US gambling. ICYMI, here’s my take on the college prop betting ban in Ohio.
Quick programming note: I’m putting out roundups for legislative efforts on sports betting/online casinos on Fridays.
How big is offshore sports betting?
Many outlets are reporting the “research” on the amount of money bet on the Super Bowl at offshore sportsbooks. That research claims that $5.4 billion was bet on the big game and that only $1.4 billion was bet legally. I am not doing a deep dive, but here are two quick takes:
Anyone trying to capture how much money is wagered offshore is doing a lot of guessing. I am not buying that the offshore industry is that much bigger than legal betting (or even bigger at all), even though you can do it in far more states. I’ll take the under.
If I am wrong and you think this number is correct, then this should be a much bigger deal for policymakers, etc. If nothing else, we know a lot of time is spent analyzing every move regulated sportsbooks make, while the offshore market — with a size that is hard to capture — operates with abandon and with none of the same guardrails, taxes or fees.
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The latest numbers for ESPN Bet
Trying to keep up with how Penn Entertainment’s ESPN Bet is performing in its early days? Some insights from January for online sports betting:
In Pennsylvania: 9% of the market by handle; after promotional spend, revenue was in the red. In third place by handle, well behind FanDuel and DraftKings, but now comfortably ahead of BetMGM and Caesars (who, we should note, are making money in PA.)
In Michigan: Similar story to PA. 9% of the market by handle, in the red after promos. Fourth in handle behind BetMGM.
As always, how good or bad this is in the eye of the beholder. Some would argue that there should have been more adoption at launch, and the floor is starting too low with no easy path to growth. Others believe plenty of growth is ahead thanks to ESPN’s ability to funnel new users and retain existing ones. ESPN Bet’s performance when North Carolina launches online sports betting next month will be an interesting test of the strength of the brand. PENN 0.00%↑ is trading at under $17 today.
SNL on sports betting
If you are living under a rock and are in the sports betting industry, then maybe you haven’t seen the Saturday Night Live sketch/fake commercial on sports betting. While SNL is no longer a cultural force, it probably does at least capture how some of the general public views sports betting. Dismiss the sentiment at your peril. Between this, the WSJ story and the 60 Minutes piece, the optics for the sports betting industry haven’t been great of late. Side note: It’s low-key crazy that John Oliver’s takedown of the daily fantasy sports industry via a sketch/fake commercial (which is much funnier, in my opinion) was almost a decade ago.
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