What Is Sports Betting?
Professional and collegiate sports are hugely popular in the United States, and indeed around the world. Millions of fans watch and follow their favorite teams, feeling the high of every win, and the low of every loss. Many of these fans want to wager a bet on the outcome of games, perhaps picking the winner or the number of touchdowns scored. If an event happens in sports, then you will most likely be able to bet on it - this is Sports Betting.
Unlike gaming in a Casino, Sports Betting is considered a game of skill and not a game of chance. Sports fans can harvest such a great understanding of their team that predicting the correct results is less reliant on chance than placing everything on black. Famously, former Attorney General Loretta Lynch argued that Sports Betting is a game of skill.
While Sports Betting has always been popular in the United States, until recently the majority of the gambling has been illegal. The trend to legalize Sports Betting in the United States is building upon a well established Sports Betting industry that generates $3 trillion globally each year.
What Leagues Are Offering Legal And Safe Sports Betting?
There is a growing list of leagues that support the Sports Betting movement, each with varying popularity and profitability. The most popular leagues are the National Football League (NFL) and College Football, National Basketball Association (NBA) and College Basketball, and the National Hockey League (NHL) and Major League Baseball (MLB).
NBA basketball has a huge following outside the United States, and it is estimated to be the third most popular for Sports Betting in the world, behind Cricket and Tennis. The men's National Collegiate Athletic Association (NCAA) march madness tournament is estimated to have nearly $10 billion wagered upon. Historically, nearly all of those bets are believed to have been wagered illegally.
Since 2018, legalized Sports Betting across the United States has exploded in popularity with plenty of choice for betting. The NFL is the most popular sports league for betting in the United States, and unsurprisingly it's the Super Bowl that creates the biggest volume of bets. Although College Sports are also very popular, with College Football Playoffs drawing betting volumes that are comparable to professional leagues.
How Is Legal Sports Betting Being Structured?
WIth the trend for legalized Sports Betting accelerating, the American Gaming Association is keen to uphold the integrity of sports competition with smart and efficient regulations. As a result, there is a greater urgency to clamp down on illegal Sports Betting and encourage use of technology to make legal and safe Sports Betting available in jurisdictions that permit it.
Many types of sportsbooks exist for Sports Betting in the United States, with Fixed Odds, Parimutuel, and Exchange being the most prevalent. Fixed Odds are when the odds for the customer's bet are fixed at the time of the wager. Parimutuel is when odds are determined by supply and demand, and Exchange bets are peer-to-peer.
Why Are Leagues And Teams Offering Sports Betting In 2022?
There has been a significant change in who is offering Sports Betting recently, back in January 2021 the first Sports Betting license was given to the NFL's Washington Football Team. This was followed quickly by the state of Arizona passing legislation to allow all major in-state teams to control access to online betting licenses. We may be seeing a shift away from traditional bookmakers to the League Teams themselves.
Mobile technology has helped to drive the popularity of the online gaming culture. It is now relatively simple for major teams and leagues to develop their applications to take advantage of the popularity of the sport and fans may be much more likely to conduct Sports Betting with their team, a brand that they implicitly trust.
Sports Betting is legal in 30+ states at the time of this writing, and technology plays an important role in keeping the games legal and safe. For example, geolocation technology is being applied to assure only users located in authorized jurisdictions are able to place a bet. This helps with Mobile and Internet Gaming Compliance which makes Sports Betting much more appealing to the Leagues, Teams and local authorities involved.
When Did This Start?
Legalized Sports Betting is big business in the United Kingdom and Europe, but the United States has been relatively slow in comparison to embrace the concept. This is due to complicated state and federal rules. In 1992, a federal law known as the Bradley Act (PASPA) was passed by George H W Bush. It banned Sports Betting on Professional and College Sports in all states except Nevada.
In 2011, the state of New Jersey initiated a significant challenge to this law, arguing that Congress had “exceeded its authority”. The state initially failed in its bid to overturn the law until May 2018, when the Supreme court overturned the ruling in a landmark case.
How Will Professional Leagues Deal With Legalized Sports Betting?
Initially, the major leagues were extremely cautious of legalized Sports Betting. In particular, the NFL was reluctant to embrace it due to concerns over its affect on the integrity of the sport. The Leagues and Fans quickly changed their viewpoint as the teams embraced the change.
It is clear that the momentum is now with the Sports Betting movement, large swathes of the United States have either legalized it or are in the process of legalizing it. It will be interesting to see how the industry handles states that still object to the movement, such as Texas.
What Types Of Wagering Are Allowed?
Online gaming platforms and the surge in Sports Betting on mobile have created a wide market that allows a large number of betting options for fans. There are two primary divisions of betting, In-Game, and On-Game Sports Betting.
On-Game wagering is when the fans bet on the result of the game, the winner, the loser, the top 3 finishers, and so on. As sports vary, the type of bets can change, but On Game always focuses on the result.
In-Game wagering is when fans make a bet on a game after the game has started, In-Game does not focus on the result, but instead, the bet is about plays within the game. For instance, how many touchdowns the team will score, the outcome of a pitch or runs in an inning, and so on. In-Game betting often has thousands of available bets delivered by online sites and gaming apps.
How Do Leagues And Operators Ensure Legal And Verified Sports Betting?
To ensure the legality of Sports Betting it is vital that bets be placed on a gaming platform authorized or licensed by the state and only from users that are present in the state. Despite more and more states legalizing Sports Betting, there is a technical need to ensure the bet is made within regulated boundaries. Geolocation services empower the Sports Betting service provider to be compliant with regulations governing the user’s allowed location.
Each Sports Betting company is carefully regulated by state gaming boards that include requirements such as identity and age verification, assuring gaming integrity, and location verification. Tech-Savvy users may be familiar with using a VPN to hide their location or identity, however, Sports Betting companies need to be one step ahead of this and other common practices. Measures to maintain such practices may include blacklisting known bypass proxies, anonymizers or VPN services, checking for the use of stolen or fake identities, and verifying a player’s source of funds.
To assure a user is in an authorized place to wager, location compliance services are typically provided by a geolocation service provider through web services API (Application Programming Interface) platforms.
It’s about the money!
There is no doubt that legal Sports Betting is big business, it has been suggested that the four major US professional sports leagues, NFL, NHL, NBA, and MLB have collectively earned $4.2 billion (per year) since Sports Betting was legalized. Not to mention the states themselves benefiting from extra jobs and greater tax revenues.
In New Jersey alone, the state oversees a betting handle of roughly $1 billion a month from Sports Betting.
We expect to see more leagues and teams entering the Sports Betting industry to harness the money that fans are willing to wager on official and 3rd party Sports Betting apps. Every major league has partnerships with sportsbooks and data companies, and there is no doubt that the global Covid-19 pandemic has increased the popularity of Sports Betting as fans couldn't get to the game - and are hungry for more action!