Editor’s Note: this article is condensed from the original by Daniel Kustelski, CEO at Chalkline Sports, on the Chalkline Sports blog. Here we’ve added updated commentary from Kustelski and SportsHandle’s Brett Smiley for each prediction. Enjoy!
Global sports betting in 2017 exceeded our expectations for several reasons:
- The United States Supreme Court agreed to hear New Jersey‘s appeal of PASPA in June, then heard oral argument in December.
- Active global industry M&A with a keen eye on the US.
- Continued rapid growth in African markets. Mobile growth, rapid product innovation, retail expansion, new conferences–there’s a lot of positive activity on the continent.
- The first Sports Betting in the USA conference captured the industry’s intense excitement about prospects for regulation in the US.
What will 2018 bring? Our predictions follow.
1. The United States Supreme Court will fully repeal PASPA.
Our legal friends and advisors have, of course, helped inform this opinion. If and when SCOTUS does repeal PASPA…it’s gonna get messy as states start pushing forward. It seems incredibly likely that there will be a legal (non-DFS) sports bet struck in a new ‘sports betting state’ in 2018, and it’s about time.
Smiley: Yep. That’s why they took the case.
Kustelski: Undoubtedly. We started with a layup. Also, if it wasn’t going to happen, the NBA legal team wouldn’t be running around into every state legislative capital.
2. A European operator will make a $500M+ US acquisition.
2017 saw significant industry M&A, and several European operators invested significantly in the US. We expect to see a $500M+ deal as global operators across the Atlantic as global operators seek US licensing opportunities.
Smiley: Maybe a collection of assets worth over $500M, but I’m not sure any US-based entity would be looking for immediate acquisition at a time of potential growth. That said: how much is FanDuel worth these days? That’s one candidate.
Kustelski: Good points. It did occur to us that if we don’t see a European operator make an acquisition of this size, we may see an non-gaming company enter the space at that level (see Verizon).
3. South African sports betting GGR will grow 25%.
The 2018 World Cup will drive growth that exceeds the expectations of PwC and other analysts. Mobile and strong retail will deliver 25%+ YOY market expansion. Overall trends in Africa continue to be positive.
Kustelski: Its a world Cup year in a country where they are World Cup crazy and sports betting accounted for 91% of the YoY GGR growth, even if Bafana Bafana didn’t make it.
Smiley: I have no clue. What Dan said.
4. Nevada legal handle will grow 10%.
With the 2018 World Cup, more live-in-play and better marketing from sports books, we predict double-digit growth in Nevada handle this year.
Smiley: Definitely. The handle has been steadily growing already. Mobile continues to grow, and is not displacing existing in-person transactions. Sports betting is no novelty in Nevada, but I think more casual bettors will emerge, maybe Nevada even gets more tourism as casual bettors want to visit the mecca.
Kustelski: Agree. And next college football season will be absolutely nuts for books.
5. US live-in-play handle will double.
Look for this number to grow dramatically in 2018 as US books offer more live products. It’s the future of sports betting in the US as soon as we regulate and start catching up with the rest of the world. It would also dramatically improve interminably long NFL games.
Smiley: Well, what’s the in-play handle now? Are we looking only at Nevada? It will get more popular, that much is for sure. Better technology will aid this growth area.
Kustelski: We couldn’t find reliable industry-wide numbers, but we didn’t want that to get in the way of a good prediction. Better tech plus growing awareness should make this happen, no matter what the 2017 live-in-play number was. But, it will be lower margin business, as any good bookmaker knows.
6. US operators will reverse the declining hold trend.
US hold numbers have trended down in the past few years, and are expected to be relatively flat in 2017. In 2018, operators will invest in analytics and tools to shore up hold and reverse the trend.
Kustelski: Good technology on live-in-play means better tech to increase hold! Bookmakers will have to address this opportunity.
Smiley: Probably. There may be some early blips by inexperienced sportsbooks, but with more recreational or “public” bettors in the market and more offerings, I think they’ll end up giving their entertainment money to the books at a decent margin.