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Sports Betting:
Assessing Today's Market And
Tomorrow's Opportunities
The firm’s work on the U.S. regulated sports betting issue includes
a series of 50-state projections that have become the widely
accepted basis for discussion of the U.S. market’s potential. Recent
state-governmental engagements have included West Virginia and
Chris Krafcik is the Managing Director of Political and Regulatory Indiana, for which Eilers & Krejcik Gaming provided comprehensive
Markets for Eilers & Krejcik Gaming and co-lead of the firm’s Sports market projections, economic impact projections, and fiscal analyses
Betting & Emerging Verticals practice. Krafcik, whose focus areas relating to sports betting and online gambling.
include sports betting and online gambling, has testified before
lawmakers in states including California on issues related to online
gambling and fantasy sports, worked directly with policymakers on
the sports betting question in Indiana, and was co-lead of revenue
forecasting for the firm’s 2019 West Virginia online gambling study.
Slide Title Here
Eilers & Krejcik Gaming’s Sports & Emerging Verticals practice is the leading voice for policy and market projection concerning the U.S.
regulated sports betting, online casino, and online poker markets. The firm’s insights and analysis are regularly cited by lawmakers,
financial analysts, publicly traded companies, and a wide variety of mainstream media outlets.
Eilers & Krejcik Gaming is the only research firm with a vertical dedicated to coverage of monthly financial and legislative developments in
U.S. regulated sports betting and online gambling markets. Subscribers to our Sports & Emerging Verticals research receive:
50+
KEY REPORT FEATURES
D.J. Leary
Director of Business Development
dleary@ekgamingllc.com
310-743-6239
Where Is The Market Today?
NY* RI
AR l
CT**
PA NJ
CT
NV DE
WV DC l l
DC***
DE l l
NM AR****
HI MS MS l
AK
NV l l
NM l
* NY regulations initially approved in January 2019 would allow sports betting at the state’s resort casinos NJ l l
** CT passed a sports betting bill in 2017 but still requires enabling legislation
*** A DC bill that would allow a hybrid public-private model for sports betting was signed by the District’s mayor in January 2019 and is pending in Congress
**** An AR ballot measure approved in 2018, along with regulations adopted in 2019, authorizes the development of four casinos and the offering of sports betting at those facilities
NY l
37% 51% 8 13 2 PA l l
Since the Supreme Court’s decision overturning PASPA in May 2018, first-wave markets have generated total handle of approximately
$2.51bn. In the chart below, we have set out handle by state. New Jersey has quickly established itself as the single largest market,
accounting for over three-quarters of total handle between June 2018 and February 2019. New Jersey enjoys a combination of
structural advantages–a large adult population, the presence of multiple professional sports teams, online distribution, a multiple-skin
model, and a favorable tax-and-fee regime–that its first-wave peers do not.
$500,000,000
$400,000,000
$300,000,000
$200,000,000
$100,000,000
$0
Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19
Delaware Mississippi New Jersey Pennsylvania Rhode Island West Virginia
How Productive Is The Market Today?
In the chart below, we have used handle-per-adult to measure the relative productivity of first-wave states. The New Jersey market,
buoyed by its uber competitive online sports betting vertical, is dramatically outperforming other newly regulating markets on a handle-
per-adult basis. We note that Delaware and Mississippi have not authorized online sports betting; that West Virginia went live with such
betting in late December (one brand recently halted operations due to a dispute with its supplier, but other brands are preparing to
enter the market); that Pennsylvania is set to go live with online sports betting in 2Q19; and that Rhode Island recently authorized, but
has yet to announce when it will go live with, online sports betting.
$50.00
$40.00
$30.00
$20.00
$10.00
$0.00
Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19
Delaware Mississippi New Jersey Pennsylvania Rhode Island West Virginia
How Big Will The Market Be By 2023?
The chart below represents our baseline estimates for the total annual revenue that regulated sports betting would generate in the
U.S. through 2023. Our projection assumes 36 states and Washington, D.C. authorize sports betting by 2023, and that those states
vary on key policy terms such as tax rate, license fee, availability of licenses, and the ability to offer sports betting online.
$4.40
$3.70
$1.90
$0.81
• Live In 2018 • Live In 2019-2020 • Live In 2021-2022 • Live In Or After 2023 • Unlikely To Authorize
WA VT
ME
MT ND
OR MN
NH
ID WI MA
SD NY RI
WY MI CT
IA PA NJ
NB
NV OH DE
IL IN
UT MD
CA CO WV VA
KS MO DC
KY
NC
TN
OK
AZ AR SC
NM
MS AL GA
HI LA
TX
AK
FL
1
Online sports betting is not broadly implemented. Our projections assume that a critical
mass of states implement online sports betting by 2023, and that online sports betting
accounts for approximately three-quarters of total sports betting revenue in each of those
states.
Wire Act havoc. The new interpretation of the Federal Wire Act, if broadly enforced by the
2
U.S. Department of Justice, could bring online sports betting–and potentially any form of
regulated gambling that touches the internet–to an abrupt halt. In the absence of online
sports betting, we estimate that the regulated U.S. sports betting market would reach only a
fraction of its potential size.
3
Industry infighting. Disagreement among industry stakeholders about how best to
implement sports betting could slow or stall legislative progress in states across the country.
A slower-than-anticipated rollout of regulated sports betting could mean a market that, by
2023, is materially smaller than we’ve projected.
Who Wins From Regulated Sports Betting, And When?
In the chart below, relative share of the opportunity refers to how much of the total profit opportunity each stakeholder can realize,
1 being the least and 10 being the greatest. And opportunity velocity refers to how long it will take each stakeholder to realize their
maximum profit potential from regulated sports betting, with 1 being the longest and 10 being the shortest.
10
Media
9
8
Commercial
Lotteries casinos
Tracks
7
Opportunity Velocity
6 Fantasy Service
brands suppliers
5 Platform suppliers
4
Sports
3
leagues
Online Tribal
2 gambling casinos
Sports
1 teams
0
0 1 2 3 4 5 6 7 8 9 10
Relative Share Of The Opportunity
Who Wins From Regulated Sports Betting, And When?
While less nimble than their fantasy and online gambling brand
competitors, retail casinos, lotteries, and race tracks will all be
able to rely on the power of their incumbency to win an outsized
share of the market.
Sports leagues and teams will see meaningful benefits that will
be largely ancillary in nature (e.g., increased fan engagement)
and take time to manifest.
5 C O R P O R AT E PA R K | S U I T E 1 1 0 | I R V I N E C A | 9 2 6 0 6 | W W W. E KG A M I N G L LC . C O M
Disclosure: Eilers & Krejcik Gaming, LLC is an independent research firm and is neither a registered
broker dealer nor a registered investment advisor. No information contained in this report shall
constitute as a recommendation or solicitation to buy or sell a security. Individuals receiving this report
should consult with an investment advisor or registered representative before making an investment
decision related to any information contained in this report. In addition, Eilers & Krejcik Gaming, LLC
either does, or may seek to do business with any company mentioned in this report. This report was
prepared for and distributed to clients of Eilers & Krejcik Gaming, LLC. If you are not the intended
recipient and/or received this report in error, please delete this document and notify Eilers & Krejcik
Gaming, LLC at dleary@ekgamingllc.com, or call 310-743-6239. This report is also protected by federal
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agree, fully, and without dispute, to all terms and conditions outlined above.
SPORTS & EMERGING VERTICALS PRACTICE – THE LEADING INDUSTRY VOICE
Eilers & Krejcik Gaming’s Sports & Emerging Verticals practice is the leading voice for policy and market projection concerning the U.S.
regulated sports betting, online casino, and online poker markets. The firm’s insights and analysis are regularly cited by lawmakers,
financial analysts, publicly traded companies, and a wide variety of mainstream media outlets.
Eilers & Krejcik Gaming is the only research firm with a vertical dedicated to coverage of monthly financial and legislative developments in
U.S. regulated sports betting and online gambling markets. Subscribers to our Sports & Emerging Verticals research receive:
50+
KEY REPORT FEATURES
D.J. Leary
Director of Business Development
dleary@ekgamingllc.com
310-743-6239