It was a year unlike any other.
Fifty years from now when prominent scribes look back at the COVID-19 pandemic of 2020, Rudy Gobert may receive more than a cursory mention in history books. Gobert’s positive test in March triggered the temporary suspension of the NBA season, resulting in a 141-day pause before the league resumed in July. Within hours, more than a dozen global professional leagues delayed or canceled events, producing an unprecedented hole in the spring sports schedule.
The spread of COVID-19 worldwide led to the cancellation of the NCAA Division I men’s basketball tournament, marking the first year the event was not held in 82 years. The cancellation of March Madness contributed to the loss of nearly $1 billion in estimated sports betting handle among legal sportsbooks nationwide.
Rudy Gobert is a Hall of Famer for this:
A positive coronavirus test in March changed the sports world https://t.co/qioqvoRpuR
— Auburn Mann (@AuburnMann) December 23, 2020
The sports world’s reaction
The COVID nightmare didn’t stop there. In March, Nevada Gov. Steve Sisolak ordered the temporary closure of every casino in the state, shutting down the famed Las Vegas Strip for the first time in decades. Much like the NBA, the NHL delayed the resumption of its season until midsummer, while Major League Baseball did not begin a truncated 60-game schedule until late July. For more than a month in the spring, nearly every tribal and commercial casino in the U.S. remained closed. With offerings limited to niche sports such as sumo wrestling, table tennis and Belarussian soccer, account withdrawals across the country began to spike. The freeze translated to an estimated loss in revenue of around $500 million for sportsbooks across the country, according to an industry source.
Meanwhile, top athletes around the world recorded positive tests, ranging from tennis star Novak Djokovic to golfer Dustin Johnson (who won the first Masters ever held in November) in individual sports, as well as NBA star Russell Westbrook and Juventus soccer icon Cristiano Ronaldo in team ones. A Thanksgiving Day matchup between the Baltimore Ravens and Pittsburgh Steelers was delayed six days after nearly two dozen Ravens players appeared on the team’s reserve/COVID-19 list that week. Although their absence moved the line six additional points in the Steelers’ favor, the Ravens won with the spread as heavy 10-point underdogs.
In baseball, numerous delays involving the Miami Marlins and St. Louis Cardinals placed a litany of futures tickets in jeopardy. The Big Ten and Pac-12 initially postponed their fall football seasons, then relented in the face of public pressure, sending books scurrying. In total, more than 125 games have been canceled or delayed due to COVID-19.
The pandemic tops Sports Handle’s list of most impactful stories of 2020. Below is a list of top stories in the sports betting ecosystem that garnered considerable headlines this year.
Robust M&A activity
In November, William Hill PLC shareholders approved Caesars Entertainment’s proposed cash acquisition of the English bookmaker for approximately £2.9 billion ($3.7 billion). The acquisition, which could be completed in the first half of 2021 pending regulatory approval, will create one of the largest gaming companies in the world. Caesars completed federal anti-trust clearance related to the proposed combination effective Dec. 28, the company said in a statement.
The deal was struck in September following a high-stakes bidding war that also involved alternative investment management firm Apollo Global Management. In the days leading up to the announcement, Caesars warned that if Apollo acquired William Hill, Caesars had the right to discontinue the U.S. joint venture’s mobile-market access rights with the British company, as well as William Hill’s retail sports betting operations in Caesars’ physical casinos.
“[This deal] recognizes the significant progress the WH Group has made… as well as the risk and significant investment required to maximize the U.S. opportunity, given intense competition."https://t.co/LE8nA5w9XV
— Sports Handle (@sports_handle) September 30, 2020
The threat of losing market access in emerging states ostensibly carried considerable weight in completing the deal. Caesars already operates brick-and-mortar facilities in states like Missouri, Louisiana, and Maryland that could roll out sports betting in the relative near future. On election night, voters in the latter two approved measures that may bring legal sports wagering to their states in 2021.
Weeks before the Caesars announcement, another transaction raised eyebrows as a potential game changer for the sports betting industry. NBCUniversal entered into a five-year deal with PointsBet in August, under which the broadcast giant received a 4.99% equity stake in the Australian bookmaker. The transaction followed a string of other partnerships between top sportsbooks and broadcast networks highlighted by deals between William Hill and CBS Sports, FOX Bet and The Stars Group, and BetMGM and Yahoo. Flutter Entertainment later completed a merger with The Stars Group.
While the flurry of deals with leading media companies increases the visibility of major sportsbooks, the deals also raise concerns about widespread consolidation across the industry.
Following a wave of media deals in the sports betting space, @PointsBetUSA is joining forces with @NBCSports. PB's Johnny Aitken believes NBC's brand equity can greatly improve marketing efficiency, drawing from the @Google/@Facebook playbook Our story: https://t.co/b3UTx3RjZk
— Matt Rybaltowski (@MattRybaltowski) August 28, 2020
DraftKings’ scintillating IPO
DraftKings made its much-awaited public debut in April near $20 a share, before doubling to $40 within a period of six weeks. Days before the NBA Finals, DraftKings traded near $65, hitting an all-time high. Despite considerable fluctuations in recent months, the company ends the year around $50 a share resulting in a market capitalization of around $19 billion.
Within 10 years, DraftKings can meet lofty projections of $4 billion in annual net revenue and $1 billion in EBITDA, according to Craig-Hallum analyst Ryan Sigdahl.
The influx of capital enabled DraftKings to ramp up marketing, as sports returned in the second half of 2020. During the third quarter alone, DraftKings spent approximately $200 million on marketing expenses, as the company continued its transition from regionally focused to national ad campaigns. DraftKings expects the strategy to pay dividends as the company expands into new markets over the next several years.
In addition to it being the largest year for IPOs, @Nasdaq saw an increase in companies using different ways to go public, including companies like DraftKings and Luminar, who went public via SPAC business combinations.
— Nasdaq (@Nasdaq) December 28, 2020
In November, Sports Handle broke an exclusive story on allegations involving the bettor of a highly publicized $3 million parlay. The bettor, who lives in Florida, claims to have made several seven-figure bets on his DraftKings New Jersey mobile sports betting account through a proxy located in the Garden State. Furthermore, the bettor contends that he received a verbal agreement from Draftkings Sportsbook Director of Operations Johnny Avello to place wagers with a New Jersey proxy. In response, DraftKings described as “patently false” the allegations that Avello provided the bettor with such a verbal agreement.
The bettor went public with the accusations after DraftKings froze his New Jersey mobile sports betting account in late October. The allegations raise questions of whether DraftKings may engage in selective enforcement in suspending certain accounts when a VIP customer continues to win at a high rate.
As of Dec. 29, an investigation into the matter by New Jersey authorities was still pending.
All is not well between #DraftKings and its $3 million parlay bettor.
In fact, there's much more to the story.
— Sports Handle (@sports_handle) November 5, 2020
Barstool joins the party
Barstool Sportsbook raced onto the scene in September, days after the start of the NFL season, making a loud entrance into the Pennsylvania market. The company’s sportsbook debut came months after Penn National turned heads with its purchase of a 36% stake in Barstool for about $163 million in cash and convertible preferred stock.
Ahead of the launch, Penn National CEO Jay Snowden expressed optimism at the prospects of adding Barstool, describing the company as a mixture of “SportsCenter, Howard Stern and Reality TV” during July’s SBC Digital North America Summit. Barstool handled about $29.9 million in sports wagers on the month, before more than doubling its handle to approximately $61 million in October. For November, Barstool’s handle fell slightly by 8.7% to $55.7 million, in line with other top sportsbooks in the state which also experienced a regression.
Penn National ended the year by launching three Barstool Sportsbooks during Christmas Week — two in Indiana and one in Michigan. In the Hoosier State, Penn opened a retail sportsbook at Hollywood Casino Lawrenceburg on Dec. 23 and Ameristar East Chicago Casino a day later. The company also opened a sportsbook at Detroit’s Greektown Casino on Dec. 23. Following Barstool’s launch in Pennsylvania, the company added a retail sportsbook in November at Ameristar Black Hawk in Colorado.
After falling to as low as $3.75 in March, Penn National shares nearly cracked $100 on Dec. 23.
Unique sports calendar creates resurgence
The absence of major sports for weeks on end triggered pent-up demand among sports bettors over the final months of the year. By September, when all four major North American professional sports leagues competed simultaneously for the first time ever, U.S. sports bettors wagered a record $2.86 billion during the month. The frenzy continued into October when the nationwide handle on the legal market eclipsed $3.25 billion.
Top 10 U.S. states by sports betting handle in Oct. 2020:
1. New Jersey: $803.1 million
2. Nevada: $659.9
3. Pennsylvania: $525.8
4. Illinois: $434.6
5. Indiana: $230.9
6. Colorado: $210.7
7. Iowa: $81.9
8. Mississippi: $61.2
9. New Hampshire: $47.0
10. Michigan: $46.1
— Ben Fawkes (@BFawkes22) December 17, 2020
New Jersey bettors then wagered a record $931.6 million on sports in November, shattering the previous monthly record by almost $130 million. Sportsbook operators held $50.6 million, the third-highest in state history. Not to be outdone, sportsbooks in Nevada won a net of $61.8 million in November, resulting in the state’s most successful month in more than five decades.
As the year draws to a close, 19 states and the District of Columbia are now live with legal, regulated sports betting operations. In total, five states rolled out sports betting operations in 2020 — Colorado, Illinois, Michigan, Montana, and Tennessee. A sixth jurisdiction, the District of Columbia, launched the D.C. Lottery’s sports betting app, GambetDC, in May.
Several others, most notably, Virginia, Maryland, and Washington State, could launch legal sports betting in 2021. In fact, regulators in both Michigan and Virginia are looking at go-live dates in January or early February 2021 for operators.
Other top stories in 2020
REMOTE REGISTRATION: Illinois Gov. J.B. Pritzker suspends in-person registration requirement. [SH]
KING CHARLES JOINS FANDUEL: Barkley signs exclusive deal with sportsbook. [SH]
CARTON RETURNS: Convicted radio host returns to WFAN. [NJOG]
ADELSON READY TO HOOK’EM: Billionaire magnate launches lobbying effort in Lone Star State. [SH]
BALLY’S VAULTS INTO SPORTS BETTING: A rapid push to broaden market share, media access. [SH]
CAPITAL ONE SPORTSBOOK: William Hill launches nation’s first in-arena sportsbook. [USB]
DRAFTKINGS, FOXWOODS MAKE DEAL: Company well-positioned for eventual Connecticut launch. [USB]
THE FINAL ROSE: Collusion accusations tarnish $1 million win by former Bachelor star in DFS contest. [USB]
THE FIX IS IN: Former Aussie table tennis pro accused of participating in match-fixing scheme. [CoBets]
BAD BEAT: Last-second safety in Eagles-Seahawks’ game changes outcome for spread bettors. [Penn Bets]
CONCERNS OVER LIMITS: Bettors air grievances on lack of transparency when it comes to limits. [USB]
POINTSBET-CU DEAL: Aussie book’s deal with school raises question on student-athlete protections. [USB]
IN-GAME RIFT: Professional bettors and William Hill quarrel over tactics on in-game markets. [SH]
5DIMES TRANSITION: Former offshore book may face strict oversight in bid to move to the U.S. [SH]
2021 LAUNCH NEARS: Michigan, Virginia eye January 2021 rollouts of mobile sports betting. [SH]