Covering sports betting and the industry for a living teaches one to expect the unexpected. No lead is safe (especially when a Matt Ryan-quarterbacked team is involved), upsets will happen (Saudi Arabia over Argentina!?), and nothing is forever, at least in familiar form (Twitter).
Last year at this time, few of us would have predicted that an active, one-time Pro Bowl wide receiver would catch a year-long suspension from the NFL for betting on NFL games. A longshot also cashed recently when the Ohio Casino Control Commission fined Barstool Sportsbook $250,000 for a violation occurring before the sportsbook even launched in the state. Elsewhere, many industry observers knew that consolidation and market departures were coming eventually (farewell, Fubo Sportsbook), so we won’t characterize that one as surprising.
Which takes us to the present — a moment to reflect and make semi-rational but perhaps wildly inaccurate predictions about what the next calendar year will hold for the industry we hold dear. For that endeavor, I asked my colleagues to lend their credibility and predictions for an attempt to peer into the near future. Here goes:
Eric Raskin, US Bets managing editor and media director: One of New York’s nine mobile sportsbooks ceases operations in the state.
We hear plenty of complaints about the 51% tax rate on mobile betting in New York and how hard it is to turn a profit, but it’s not hard for everyone. FanDuel, for example, made $78.3 million in New York in November, and even after forking over a little more than half of that to the state, there’s plenty left over to provide egregious executive bonuses and whatnot. DraftKings is doing fine too, and BetMGM and Caesars are probably clearing enough to cover all the costs of doing business in the Empire State.
But it’s a “haves and have-nots” situation. Below those big four who aren’t afraid to spend big are five operators carving out much smaller pieces of the pie. PointsBet and BetRivers are making a couple million bucks apiece per month in revenue, before taxes, during football season, while WynnBET, Bally Bet, and Resorts World Bet are lagging behind even those modest numbers. It’s unsustainable for some of these mid-sized operators.
It’s not a bold prediction to say an operator will eventually leave the New York market. But it is perhaps bold to suggest it will happen in 2023, so soon after paying the $25 million license fee to get a foot in that door. And that’s what I think will happen. One of these sportsbooks is going to decide the path to profitability isn’t there, and New York will be down to eight operators by the start of 2024.
Jeff Edelstein, analyst and opinionist: Scrutiny and squirming are coming.
The New York Times recently published a four-part investigation of the nascent legal sports betting industry.
The legal sports betting industry did not come out looking too good, with the stories detailing how lobbyists and the sports betting operators allegedly hoodwinked state representatives, how Barstool Sports’ Dave Portnoy is a pox on the industry, how the sportsbooks are infiltrating college campuses.
It was a bit of a hit job, honestly.
But it has gotten the attention of state legislators. In New York, a politician has introduced legislation to curb the bonusing by sportsbooks, and the Massachusetts review of PENN Entertainment’s sportsbook license was affected by concerns about Portnoy.
As a result of increased scrutiny, I see 2023 being a tough year for the industry at large, reminiscent of the battles daily fantasy sports had to face in 2015-16.
In short: I expect more legislators in more states to have more questions about how sportsbooks operate, and I wouldn’t be surprised if there’s some movement on the federal level to take a harder look at the whole scene. The sportsbook industry will survive this magnifying glass, but it has the potential to be very uncomfortable for a lot of people.
Matt Rybaltowski, senior reporter/analyst: Fanatics’ shares will pop if company goes public in 2023.
At some point in 2023, Fanatics, a popular e-commerce vendor of licensed sports merchandise, is expected to launch BetFanatics, the company’s online sportsbook division. A prediction that BetFanatics will launch in Maryland and Ohio next year is neither bold nor original.
But in conjunction with its sports betting debut in 2023, there is speculation that Michael Rubin’s company will pursue an IPO. Earlier this month, Fanatics generated about $700 million in a fresh round of funding, pushing the company’s valuation to $31 billion. Fanatics has the capital to pursue a major sportsbook acquisition, one that is large enough to fulfill Rubin’s goal of going live in at least 15 U.S. states by the start of the 2023 football season.
My prediction is that if Fanatics completes an IPO in the second half of 2023, the company will get off to a quick start on public markets. BetFanatics will have a built-in advantage over traditional top sportsbook, which have reined in marketing spending in recent months. Fanatics’ vast database from jersey sales and other merchandise enables the company to market to thousands of new customers without breaking the bank on acquisition costs. Moreover, the company can transform the in-stadium experience by offering sports betting, NFTs, and exclusive team-licensed gear from a common wallet.
Questions on whether Fanatics can seize market share from the Big 3 on a long-term basis are still up for debate. Nevertheless, I wouldn’t be surprised if investors give Fanatics a shot in 2023 — at least for the company’s initial foray into sports betting.
Brett Smiley, editorial director: A new law will reel in sportsbook marketing/advertising.
In 2023, a state that’s already legalized sports wagering is going to pass some kind of new restriction concerning marketing and advertising, or some limitation/retraction on betting activity that is already permitted. Or maybe it’s the federal government — at least one chamber in the next Congress.
Jeff noted above that the Times package seems to have had real consequences for PENN/Barstool. And for Caesars, its partnerships with colleges were called out by Connecticut Sen. Richard Blumenthal as a “disgraceful practice.”
I think we’ve reached the point where the regulatory sentiment becomes more restrictive, and policymakers will do some policing that industry participants may not be doing well enough on their own. We’ll see what form it takes, but I’m thinking it could be something like a codification of certain advertisements/language (maybe the language “risk-free bets” gets banned). Or it may be something right out of the AGA’s own code, such as prevention of certain marketing that could appeal to minors.
Mike Seely, associate editor: XFL wagering will be robust.
The harsh reality for any league attempting to compete with the NFL — even if its season isn’t a head-to-head proposition — is that there probably won’t be enough top-flight talent to fill out all the rosters. But don’t bet against Dwayne “The Rock” Johnson on at least making his newly acquired XFL interesting — specifically because we’re wagering that the wrassler-cum-actor will conjure up some sort of innovative scheme that will place his league on the sports betting vanguard. What will this look like? Who knows?! But we can smell what the Rock is cookin’.
Sat down with @XFLGuardians head coach @27TBuck to preview the upcoming @XFL2023 season! In this clip:
🏈 Talks about how special it is to coach in Florida
🏈 Discusses drafting former @UCF_Football star @KnightBred_41 and FSU QB Deondre Francois pic.twitter.com/fIr7NqSpz5— Alex Walker (@AlexWalkerTV) December 19, 2022
Chris David, SVP operations & marketing at VegasInsider: Ohio will easily be the second largest betting market in the US, challenging New York.
All the projections have Ohio taking close to $9 billion in bets in 2023, but I’d go “over” that number. I expect the Buckeye State to rack up 11 digits and top $10 billion in handle next year. Along with being among 13 states to boast at least one major professional team in each of the four major sports (NFL, NBA, NHL, MLB), Ohio is one of seven to have two NFL teams (Cleveland Browns, Cincinnati Bengals) and one of eight with two MLB teams (Cincinnati Reds, Cleveland Guardians).
While the pro sports garner plenty of interest, the advantage for Ohio over a New York or New Jersey is its reach with the college football audience. The state has eight Division 1 schools, second most in the U.S. behind Texas, and those include competitive teams in Ohio State and Cincinnati, plus six from the Mid-American Conference (or what gamblers have identified for their mid-week match-ups as MAC-tion). Combine all those events with die-hard football fan bases and it makes me believe Ohio will challenge New York’s numbers by the fourth quarter of the year.
Dan Back, SVP RotoGrinders & ScoresAndOdds: Missouri and Kentucky will join the party.
I think both Missouri and Kentucky will find a way to cross the online sports betting finish line this year. Every month that they keep the status quo, they are losing revenue to border states, and I don’t see the roadblocks to legalization being insurmountable.
And although it’s not imminent after Bob Iger rejoined Disney, I think we will see DraftKings make a big move in a partnership with ESPN. ESPN needs a partner, and DraftKings and its stock price need a boost after clearly falling behind FanDuel, though what form a new partnership would take is hard to say. An ESPN betting app only makes sense if it’s a white label of DK’s. It’s possible but doubtful that DraftKings wants to compete versus itself. I won’t be shocked, however, if there is a massive media acquisition involving these two in 2023.
Matt Schmitto, commercial content lead at RotoGrinders & ScoresAndOdds: The Texas Legislature will pass a mobile sports betting bill, setting the stage for a constitutional amendment.
From Baptists to out-of-state casino interests, there’s plenty working against any form of legalized gambling in Texas, but there is hope for sports bettors in the Lone Star State next year.
The Sports Betting Alliance, made up of all major sports franchises in Texas, is ready to push lawmakers with some lobbying help courtesy of former Gov. Rick Perry.
Tapping Perry’s libertarian streak, the alliance hopes to convince the legislature of the benefits of legalized sports gambling. After all, sports betting already takes place in Texas, but it’s through black and gray markets, including nefarious offshore sites that shall go unnamed.
Lt. Gov. Dan Patrick, who has big sway in the legislature, is on the record against legalization, but for a state whose lawmakers love to talk about freedom, hypocrisy is bigger in Texas, too. While the Sports Betting Alliance might be an underdog, I’m happy to take plus-money odds on the likes of Jerry Jones and Mark Cuban.
Even then, needing approval from two-thirds of Texas voters, sportsbook apps like BetMGM and FanDuel will have a long road ahead before they’re accessible in the state. So, will Texans approve? A 2023 Cowboys playoff run and Luka Doncic MVP year will be enough to win them over
Patrick Everson, senior reporter at VegasInsider: Legal political betting will touch down in U.S.
Political betting is massive. In the United Kingdom, punters — the British term for bettors — often love betting on American politics more than the politics of their homeland. It’s a legal/regulated market, and not just in a traditional sports betting sense, as Betfair offers trading on election outcomes.
You can now bet on American politics in Ontario, where DraftKings offered markets on the 2022 midterm elections. So literally right across the northern border, there’s a jurisdiction in which you can legally bet on U.S. election outcomes. Meanwhile, countless Americans are betting on political odds in offshore — read: unregulated — markets. Yet America plods along, with bureaucracies finding ways to ban PredictIt, instead of taking advantage of a massive legal/regulated betting opportunity that’s been proven to work elsewhere.
My bold prediction: A smart state, with equally smart legislators/regulators, will find a way to move the ball forward on betting on U.S. political odds. Just imagine how much more lit the 2024 presidential election will be if you can bet on it!
