US sportsbooks expect big boost from March Madness

The tournament could become the most wagered event in American sports history, beating the Super Bowl – Photo: Shutterstock

Total betting on the NCAA men’s basketball tournament is expected to more than double to a record $3bn (£2.3bn) this year, due to wide adoption by the State of Mobile Sports Betting, According to a Gambling Industry Report.

American NCAA Men's Basketball Tournament BettingThe 2020 NCAA Tournament has been canceled due to Covid-19 – Credit: Capital.com, with data from PlayUSA

If the total handle hits the high of the estimates, it would represent a more than 114% increase over the $1.4 billion 2021 NCAA Tournament handle and become the most-bet event in American sports history. , according to analysis by PlayUSA.

By comparison, Super Bowl XLVI, played last month in front of a television audience of more than 101 million viewers, generated around $1 billion in wagers. While the Super Bowl is a one-day event, the NCAA Men’s Basketball Tournament, made up of 68 American college basketball teams, spanned three weeks and culminated in the Final Four scheduled for the April 2-4 in New Orleans, Louisiana.

“The high betting volume is a function of the popularity of the NCAA tournament coupled with 67 games played on a condensed schedule of just a few weeks,” PlayUSA analyst Eric Ramsey said in a statement. “Add to the proliferation of legalized sports betting across the United States, and this year will easily shatter the record for most-bet event set last year by March Madness.”

Upheaval Tournament

One of the differentiators of the NCAA Men’s Basketball Tournament is the knockout format, which tends to lead to unexpected results. For example, the second favorite to reach the Final Four national semifinals, the Kentucky Wildcats (68.5% of entries submitted to the ESPN.com Bracket Challenge competition had Kentucky in the Final Four), lost in the first round. of the tournament. to the little-known Saint Peter Peacocks, an 18-point underdog from New Jersey.

“We don’t expect the upheavals to have a material impact on the national handle, if at all, and unexpected results are factored into our handle projection,” PlayUSA spokesman Zach Hall said. in an email. “Also, Kentucky fans might not travel to Indiana as much now, but St. Peter fans — or casual fans who just like to support the underdog — might be more likely to place a bet.”

“If we get something really unusual, like St. Peter’s making a run to the national championship game, that could change things more significantly,” Hall added.

Race for market share

DraftKings Inc. (Nasdaq: DKNG) July 25, 2019 - March 22, 2022DraftKings Inc. (Nasdaq: DKNG) July 25, 2019 – March 22, 2022 – Photo: Koyfin

The problem is the trend that, historically speaking, the top three online sports betting operators in each state tend to control at least 80% of the local market share, noted Jason Robins, CEO of DraftKings (DKNG), during Investor Day 2022 this month.

“In mature markets, like New Jersey, the top three online sportsbooks account for 80% of gross gaming revenue,” Robins said during the virtual conference call.

DraftKings declined to comment, citing his quiet period.

Market Share of Top 3 OSB Operators by Gaming RevenueMarket share of top 3 OSB operators by gaming revenue – Credit: DraftKings 2022 Investor Day Presentation

Eight new states

Since last year’s NCAA tournament, eight additional states – including New York and Louisiana – have legalized sports betting, bringing the total number of state jurisdictions to 30 US states and the District of Columbia. The total population living in states that allow sports betting is nearly 116 million, PlayUSA estimates.

Caesars Entertainment Inc. March 2, 2020 – March 21, 2022Caesars Entertainment Inc. March 2, 2020 – March 21, 2022 – Credit: Koyfin

Sports betting was only legal in seven states during the 2019 NCAA Tournament and the NCAA Tournament handle totaled $440 million, according to PlayUSA estimates. The 2020 tournament has been canceled due to Covid-19.

Unsurprisingly, Nevada, New Jersey and New York are expected to provide the largest state handfuls, contributing around $400 million each. While Nevada draws large crowds for the tournament’s opening weekend, which consists of 48 games played over a four-day period.

“For years, Nevada has relied on the first weekend of the NCAA Tournament as a great opportunity to attract hordes of bettors to physical sports betting on the [Las Vegas] Strip,” PlayUSA Principal Analyst Dustin Gouker added in the same statement. “Vegas will still draw huge crowds next week, but now about half the country can get in on the action without ever leaving the couch.”

New York, which legalized online sports betting in January, is set to take the top spot in sports betting in 2022, after New Jersey led the nation in online sports betting. Nevada is expected to see the most in-person wagering at the myriad of gambling halls operated by Las Vegas casinos.

On-site betting boost

Boosting the 2022 handle, PlayUSA added, is the location of the Final Four in a state that legalized online sports betting this year, New Orleans, Louisiana. Additionally, six tournament sites, hosting first-round matches, are located in jurisdictions where sports betting is legal.

“This year will be significantly different from last year’s tournament,” PlayUSA’s Ramsey added.

“Thousands of fans will travel to games in Illinois, Indiana, Louisiana, New York and Pennsylvania during the tournament… It will make a difference.”

MGM Resorts International (NYSE: MGM) March 2, 2020 – March 21, 2022MGM Resorts International (NYSE: MGM) March 2, 2020 – March 21, 2022 – Credit: Koyfin

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