Sports Betting Market Struggle Continues
The United States sports betting market continues to report declining revenues as major sports leagues remain closed to curb the spread of the coronavirus. The latest sportsbook reports from five recently legalized betting markets have seen revenues dip 79 percent since the leagues were closed in February.
The five states include Indiana, Iowa, New Jersey, Pennsylvania, and West Virginia. Collectively, they generated a handle of $1.1 billion in February, with revenues of $34.4 million reported. In April, the sports betting handle dropped 88 percent to $130.5 million, with combined revenues down to $7.4 million.
Until the five major sports leagues recommence, the betting market is currently propped up by alternative sports like NASCAR, horse racing, esports, UFC and even Russian table tennis. For now, bettors and sportsbook alike are hoping that the NBA’s plan to return in July will not be postponed any further.
According to Patrick Eichner, the director of communications for PointsBet USA, sportsbooks have had to adapt how they promote other sports to lure bettors in. One campaign titled ‘March Strangeness’ was launched in lieu of March Madness, and featured educational videos on how to bet on obscure sports.
“As sport cancellations and postponements started to occur mid-March, the team quickly shifted focus from plans as they stood toward brainstorming on how to create excitement and encourage betting in the absence of mainstream sport.”– Patrick Eichner, Director of Communications, PointsBet USA
Eichner points to their pivot toward new wagering options as being a saving grace, with the current daily table tennis handle comparable to that of a golf major. Other sporting related events, like the NFL draft, also marked major comebacks for sportsbooks, with this year’s draft attracting a record number of bettors.
While these wagering options are certainly helping to lessen the sting of the major leagues’ absence, it’s highly unlikely that relying on lesser-known sports is sustainable. So far, the NFL has made no changes to this year’s schedule, while the NHL has been discussing a temporary alternative playoff format.
Current Betting Habits
In a recent interview, Jay Rood, the chief risk officer of sports betting platform developer Bet.Works discussed the current gambling habits of sports bettors. He too pointed to the popularity of table tennis, and acknowledged that the regularity of games being played was a major factor of its success.
Rood reported that many new customers were increasing $5 bets to $100 bets as they become familiar with the sports and its rules. In addition to table tennis, UFC and NASCAR, bettors have also been fond of charity golf events and games played in the 10-team Korea Baseball League (KBO).
However, while the KBO has satiated Major League Baseball bettors appetites for baseball wagers, the difference in time zones has no doubt hindered the KBO’s betting handle potential. Rood has estimated that the betting handle would likely be twice or three times its current amount if it were at a more convenient time.
Surprisingly, active sports such as the UFC have been getting bet on at a lower volume than they usually would at this time of year, even though there is less competition. In fact, it appears that many regular and pro bettors are not engaged with sports betting at all at the moment.
It is expected that these customers have been turned off by the absence of regular betting options that they understand. Thankfully, an influx of new casual bettors has been keeping sportsbooks active. There’s also been plenty of interest around futures bets and seasons props on the upcoming NFL season.
The Fall of the XFL
It’s not just the sportsbooks that have been stung by the coronavirus closures. After beginning its debut season to much fanfare and bettor interest, the XFL professional football league was forced to suspend its season on March 12 after only five weeks of games. On April 20, the XFL filed for Chapter 11 bankruptcy.
The news came as a surprise to many, as it initially promised to return in 2021 when the suspensions were announced. Then only weeks later, administrative staff were given a pink slip and told of the league’s closure. The league and its trademarks are now up for sale as a result of the bankruptcy filing.
The loss of the XFL is a sad affair for sports bettors, as the league was among the first to fully integrate legal sports betting information into its broadcasts. Commentators often discussed point spreads and over/under totals, and on-screen graphics also helped visualize information that would be beneficial for bettors.
The XFL even entered into a partnership with Genius Sports, a highly regarded sports data and technology company. The deal was set to create an integrity program that would concern itself with sports betting on XFL games. The XFL was the first professional sports league to create such a program.