The Emerging Industry of Sports Betting

Sam Schiffman 21', Lead Sports Editor

When tuning into NFL Countdown any given Sunday on ESPN, you will see the various matchups taking place that day. You will also see the odds that are set for the games. For example, a team may be posted at -3 points meaning you are betting that team will win by 3 points or more, this type of betting is called a point spread. Another common bet is called a money line, which means you are betting on that team to win outright. These odds may look like -150 for example meaning you would risk $150 to win $100. On the opposite side if a team is +150 it means you risk $100 to win $150. 

A couple of years ago, you would rarely see odds on ESPN but nowadays it seems as though any coverage on a game is accompanied by the betting odds. And while sports betting is not currently federally legal, 19 states have legalized it, with 4 states passing bills that will take effect next year. This heightened interest in sports betting can be attributed to states passing laws that make it legal, as well as the emergence of various companies hoping to take advantage of the growing market. 

One of these companies is Penn National Gaming, who partnered with the  highly popular Barstool Sports, released the Barstool Sportsbook this past September. The sportsbook which is currently only available in Pennsylvania, managed to generate a whopping $78 million dollars in revenue, across only 30 thousand users. Penn announced plans to release their sportsbook in Michigan later this year, which will generate even more revenue for the company. The companies stock has reflected the growing interest in sports betting industry, with year to date gains of 125%.

Another company whose stock has skyrocketed this year is Draftkings, which has put up massive gains of 250% so far this year. Draftkings is currently operating in eight states, including, New Jersey, Pennsylvania, Indiana, New Hampshire, Illinois, West Virginia, and Colorado. Draftkings also just announced a major partnership with 2020 US Open winner Bryson Dechambeau. Dechambeau who is known for his massive drives, should be a good addition to the Draftkings team, and help market their product. 

While sports betting is still federally illegal, legalization is not too far away, and would bring in massive tax revenue for the government. While bettors in legal states can easily visit the various apps and websites, those who want to catch in on the action in states where it is still illegal, may need to turn to illegal bookies. According to the American Gaming Association “at least 150 billion dollars annually” is illegally gambled. This massive amount of money is not only missed out by established betting companies, but as well as the missed taxes that could be collected. 

The legalization of sports betting is as inevitable as the legalization of marijuana. With both vices sharing some similarities in terms of tax dollars and unregulated market space, the federally government will eventually have no choice but to make them legal. If and when legalization does occur, be on the lookout for companies like Penn, Draftkings and Fanduel to expand their marketplace, and implement their product into the homes of people not only in the U.S., but worldwide


*Disclaimer. The Lobby Observer does not promote any illegal or underage gambling. This article serves as an information piece about the impact of more and more states adopting legal sports betting, and the companies that serve to profit from this.