95% of Money Wagered on Super Bowl Remains Offshore, Restrictions on Mobile to Blame

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Sports betting may be legal in 8 states, but an American Gaming Association survey indicated that 95% of the expected $6 billion to be wagered on Super Bowl 53 (up from $4.76 billion last year) will be placed through unregulated or illegal channels. 8% of fans (1.8 million) gambling illegally on the game will place bets with their local bookies, the balance will give their business to off-shore online sportsbooks. Super Bowl bettors have been slow to migrate to a legal means of wagering, just 2% of those who bet on last year’s game illegally are expected to transition to a licensed gaming operator this time around.

Howie Long-Short: With 15% of the country offering legalized sports betting and the regulated gaming industry only expecting to covert 2% of fans from grey markets for the Big Game, it’s worth wondering why gamblers are foregoing the legal avenues available to them. VSIN CEO Brian Musburger explained to me that “most states that are currently operating prevent bettors from funding their mobile accounts without depositing cash at a brick and mortar casino (see: NV) and others – like Mississippi – only permit mobile gambling on the premises. Once bettors can fund mobile sports betting accounts with a credit card and place bets remotely, you’ll see that number explode; you’ll see a huge surge in deposits. As it currently stands, in many states it’s still easier for people to bet offshore than it is to do it in a regulated environment.”

What can the states do to convert those betting offshore into domestic sports bettors?

Brian: It’s on the states to be competitive [with pricing]. A good sports bettor is always going to seek the greatest potential edge. If the states overtax sports betting and regulated markets can’t be competitive with the illegal markets, the big money will remain in the gray areas. Smart Money looks for prices if the state taxes are too onerous that will only keep money offshore.  

Nearly 1/10 Americans (22.7 million) will place a bet on Sunday’s game, but you won’t hear Jim Nance or Tony Romo (they’re on the call) reference the line (NE -2.5) or over/under (56.5). That’s because with sports betting legal in just 16% of the country, CBS has opted to avoid the topic. That could change by the time Super Bowl 54 rolls around though as upwards of a dozen states could add sports betting legislation over the next 12 months. Fox has the broadcast rights to the 2020 game. I asked Brian if he would expect Murdoch and Co. to include gambling conversation and/or commercials during the game broadcast – if 40% of the country were to permit sports betting within their borders?

BrianWell, after reading JohnWallStreet’s column from yesterday about Super Bowl advertising rates, Fox should be incentivized to take ads from casinos. But back to the first part of the question, the primary rights holders should probably stay away from sports betting; you don’t want to alienate your audience and there’s a lot of kids watching the Super Bowl that shouldn’t be inundated with sports betting talk. However, many of the people tuned into the game do have money on the line. Those individuals can use their second screen for sports betting information and I think they’ll find an outlet like VSIN is more informative and of far greater utility to them, than what Tony Romo (or Troy Aikman) will provide.

The NFL wants prop bets (wagers on an individual/team performance unrelated to the game’s outcome) “restricted – or even outlawed” deeming them too vulnerable to fixing/manipulation, and has asked congress to “allow professional and amateur sports organizations to identify which types of bets simply pose too significant a risk to the integrity of sports and to work with regulators not to authorize them.” Good luck with that. As Brian told me, “if there’s a marketplace for it, it will continue no matter what the NFL Commissioner says; and there really isn’t even a reason for the league to be concerned. The amount of money you can put down on a prop bet would never be enough to sway a professional athlete; most sports books place a low limit on props.”

Fan Marino: Most the money that has been bet on the game thus far has been sharp money. That’ll change by Sunday as casual bettors begin to place wagers on things like the coin toss and national anthem. As of Thursday evening, the money wagered in Las Vegas has been split between the Rams and Patriots.

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Author: John Wall Street

At the intersection of sports & finance.

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