- American sportsbooks saw revenues more than triple from January 2019 to January 2020.
- Total betting handle increased greatly as well, even after accounting for industry expansion.
- With more states set to launch sportsbooks in 2020, this trend of growth should continue.
LAS VEGAS – In the nine states that report sports betting financial information, revenue increased from $41.9 million in January 2019 to $133 million in January 2020—an increase of 217%.
Total January betting handle also increased, from $1 billion in 2019 to $1.74 billion in 2020.
Overall sports betting revenues have been consistently increasing since the repeal of the Professional and Amateur Sports Protection Act (PASPA), and they only project to grow further as more states are set to pass legislation to legalize sports betting in the near future.
There were a few notable catalysts for this growth, including the addition of two new states (Iowa and Indiana) to the data set, overall industry expansion, and a much healthier hold percentage for sportsbooks than last January.
Still, even accounting for these factors, sports betting in America is much healthier than it was this time a year ago.
If both states that didn’t offer sports betting in January 2019 are removed from the data stream, sportsbooks still handled $1.51 billion in total wagers and earned $117 million in revenue in January 2020—increases of 51% and 179%, respectively.
Hold percentage, or the percentage of betting handle that sportsbooks convert into revenue, also increased greatly, from 4.17% in 2019 to 7.66% in 2020.
Hold percentage is a highly variable statistic, especially during times with a high volume of bets on a low number of events, like the NFL postseason.
Still, even if sportsbooks had posted the same meager hold rate in 2020 as they did in 2019, their revenues would have been $62.9 million.
Of the seven states that were reporting sports betting revenue in January 2019, only one saw a year-over-year decrease in betting handle—Delaware. This may have to do with their lack of mobile betting in Delaware. The state still saw a slight increase in revenue because of a sizable increase in its hold percentage.
Implications For Sports Betting In 2020
Sports betting in the United States is in a better position than it has ever been, and projects to grow even further in 2020. Four states—Tennessee, North Carolina, Michigan and Illinois—have legalized sports betting and are currently in the process of launching full sportsbooks early this year.
After these launches, the number of Americans living in legal sports betting states will increase from 71.6 million (21.9% of the population) to 111.5 million (34.1%).
While it will take some time for sports betting in these four states to reach its full potential, the potential financial impact will likely be massive. Using per capita averages, they project to handle nearly $6 billion in bets annually and earn $416 million in revenue.
That money would also generate $50 million in taxes to improve education, infrastructure, and miscellaneous state programs.
Roughly a dozen other states are considering sports betting legislation during the 2020 legislative session, including both Florida and California. While many of these won’t take effect until 2021, the American sports betting industry is likely in store for exponential growth in the near future
With a dual background in English and sports performance and business analytics, Carter aims to write stories that both engage and inform the reader. He prides himself on his ability to interweave empirical data and traditional narrative storytelling. When he isn’t keeping readers up to date on the latest sports betting legal news, he’s banging his head against a wall regretting his decision to be a Tampa Bay Buccaneers fan.