Though many industries have been put on hold due to the Coronavirus pandemic, the mobile sports betting industry has soared over the past year. Mobile app adoption has increased significantly as casinos and betting shops closed, and it doesn’t look like the momentum will be slowing down any time soon.
Amanda Triest is the Managing Partner of Cardinal Communications, an agency specialising in reputation management for corporate and nonprofit organisations and individuals. She has most recently focused on startups and thought leaders in fintech and financial services.
Here she discusses how Covid-19 has driven innovation and growth for the US mobile sports betting industry.
State restrictions on in-person gatherings, mandated closures or other changes have pushed many businesses to the brink of collapse. Despite the devastation and monumental hurdles that COVID-19 has caused, the pandemic has also spurred heavily debated and highly-regulated industries into exponential growth. For mobile sports betting apps like DraftKings and FanDuel, COVID-19 has thrust open the doors to record-high revenue, and it doesn’t look like that will be slowing down any time soon.
At the end of Q1, Jason Robins, DraftKings co-founder, CEO and Chairman of the Board shared that “DraftKings recorded standalone Q1 year-over-year revenue growth of 30% despite the effects of COVID-19.” And, as the year went on, the growth continued for the company. In November, DraftKings reported its financial results for the third quarter of 2020, posting “revenue of $133 million, an increase of 98% compared to $67 million during the same period in 2019.”
The closing of casinos and in-person betting establishments has pushed more and more people to begin using online betting options. And, naturally, as we see an increase in mobile app adoption, it’s easy to understand the explosive revenue growth. Not to mention, reports suggest that mobile players convert faster into paying customers, as well as make more bets overall.
COVID-19’s impact on sporting events, including delays and cancellations of many events, pushed gaming operators to rethink their offerings. According to Kevin Hennessy, Director of Publicity at FanDuel, the first US sportsbook to offer live streaming of sporting events inside a betting app, the company had to quickly adapt and expand its offerings, allowing users to bet on non-sporting events as well.
“Over the past several months, we’ve prioritised offering customers innovative games to play and new forms of entertainment, giving them more ways to win than ever before, across major sports and marquee events not tied to sports, such as political debates, awards shows, reality TV competitions, and more,” shared Hennessy.
How Does Mobile Betting Work?
A mobile sportsbook app, which is available via iOS and Android smartphones and tablets, offer hand-held, on-the-go options for bettors to place wagers. To place bets, users must sign up for a free account, which can then also be used on a desktop computer as well. After signing up, users are able to make deposits, place bets and access any promotional offers, such as free bets or boosted odds.
In order to make deposits into an account, users can choose from a variety of payment options including online banking transfers, PayPal, credit and debit cards, bank wire transfers, as well as one-click pay services like Apple Pay and Google Pay. Once a user has money in their account, they may keep a running credit balance without needing to cash out after each bet ends. This allows users to quickly place additional bets without having to deposit funds each time.
It’s worth noting that there are several operators offering crypto-based betting apps too. However, the use of Bitcoin and other cryptocurrencies is not a common practice among operators in the United States.
Mobile sportsbook apps are available for download anywhere. However, you must be located within a state where online betting is regulated in order to place bets (not to mention, you still must be 21 years of age to gamble!). According to the FanDuel website, “As state laws regarding online betting differ significantly, sportsbook apps must be fitted with geolocation technology.” Meaning, the user must have their cellular location feature turned on.
Currently, 18 states, as well as the District of Columbia, have legalised sports betting. But only 14 of them currently allow mobile betting. These states, which represent approximately 25% of the US population, include:
- New Jersey
- West Virginia
- New Hampshire
- Rhode Island
- District of Columbia
Money. Money. Money.
As the COVID-19 pandemic continues to disrupt “normality,” it appears that sports bettors are continuing to favour the use of mobile apps to place their wagers.
The total amount of money being wagered – “the handle” – is overwhelmingly coming from mobile apps. According to RoundHill Investments:
- 5% of the sports betting revenue in Pennsylvania comes from mobile bets.
- In October 2020, 100% of the $40 million online handle in New Hampshire was placed on the state’s only mobile sportsbook, Draft Kings.
- In Nevada, online mobile sports betting was responsible for a little over half of the handle ($659.6 million) in October 2020.
- 77% of the September handle in West Virginia came from mobile.
- In Colorado, where sports bettors have more than 10 different mobile app options, “sports betting in the state has seen a month-to-month increase in overall betting handle for five consecutive months. In July, CO passed $50 million in total handle for the first time; in September, the monthly handle surpassed $200 million.”
And, the story’s the same in Rhode Island, where mobile betting was responsible for nearly $2 million of the total state revenue in October 2020, up 133.6% from the month prior. Since mobile betting launched in 2019, over $15.3 million has been wagered on sports in Rhode Island through mobile betting.
Historically, there’s always been a lot of money in gambling. With the addition of mobile betting, the pot’s gotten even bigger. In fact, the amount of tax revenue that could be generated from mobile sports betting apps is a consideration for policymakers as they look at post-pandemic economic recovery.
Earlier this month, New York Yankees Team President Randy Levine cited expanded gaming, including mobile sports betting, as an opportunity to help New York City recover from COVID-19. Levine, who once served as Deputy Mayor of Economic Development, Planning under Rudy Giuliani, believes that “Mobile Sports Betting can also help the restaurant and hospitality industry generate revenues.”
Keeping in mind that location matters when using a mobile sports betting app, it is “conservatively” estimated by the research firm Eilers & Krejcik Gaming that in 2019, New Yorkers bet an estimated $837 million in New Jersey due to the lack of online and mobile sports betting within their state, causing New York to lose out on an estimated $6 million tax revenue.
2021 & Beyond
There’s a lot of action happening around the legalisation of sports betting. Already in 2020, the following states voted to pass sports betting initiatives: Tennessee, Michigan, Maryland, South Dakota and Louisiana. And, online and mobile gaming operators are jumping into new markets.
“We just launched our online sportsbook in Tennessee and expect to launch in Michigan. We expect several more states to come on board between the end of 2020 and early 2021.” shared Hennessy.
COVID-19 caused many states who were in discussions about the legalisation of sports betting to put their conversation on hold. As we move into a new year, there are several states that may consider re-examining sports betting legalisation, including Alaska, Arizona, California, Florida, Kansas, Maine, Massachusetts, Missouris, Ohio and Oklahoma. And, given the recent announcement from the Mashantucket Pequot Indians, who operate Foxwoods casino, that they would partner with DraftKings Sportsbook for online sports betting, the outlook for mobile sports betting in Connecticut looks promising, too.
While the future is uncertain for where mobile sports betting will grow, the future success of mobile sportsbook apps is a sure bet.