US sports betting will be a $7 billion to $8 billion industry by 2025, according to projections by investors and gambling executives.
The historic May 2018 ruling of the US Supreme Court annulled a long-standing federal ban on athletic wagering and paved the way for all states to legalize the practice, if they feel inclined to do so. So far, 14 states felt inclined to tap into the sports betting space and many others are considering it.
During the NYC Sports Betting Investor Summit, which took place this past Monday, panelists provided their predictions about what the near future has in store for legal US sports betting and warned that not all who delve into the nascent but rapidly growing industry will survive the competition and the pressure of the enormous costs related to customer acquisition and retention.
According to Morgan Stanley, which sponsored Monday’s summit, the US market will generate nearly $7 billion in revenue by 2025, up significantly from $833 million in 2019. Previous estimates by the bank suggested that US sports betting could become a $5 billion industry within the next five years.
At the event, executives from some of the major players in the US gambling field, including MGM Resorts International, Hard Rock International, and Mohegan Sun, made similar predictions, saying that sports betting could generate between $6 billion to $8 billion in revenue by 2025.
It’s War Out There
Panelists warned that despite the more than promising predictions, not everyone who has ventured or is about to venture into US sports betting would claim a nice share of the market. Many would fail, investors and executives said, squashed by the high costs of promoting a successful sports betting business and acquiring customers in a highly competitive field.
PointsBet Chief Information Officer Seth Young said Monday that “it’s war out there” and that “at the end of the day there’s going to be a lot of carcasses out there on the road.”
Scott Butera, President of Interactive Gaming at MGM, added that the market is growing rapidly in terms of revenue, “but it’s a very tough market” and that while everybody wants a piece of the US sports betting pie, “we’ll see some shaking out.”
MGM formed last year a sports wagering joint venture with Isle of Man gambling group GVC Holding to tap in the US athletic gambling market.
Panelists said Monday that at least 10 new sports betting operators could join the field in the coming years.
Summit participants pointed to one major hurdle that is hampering the even quicker growth of US sports betting. Many customers find it difficult to deposit funds in their accounts as many major credit card issuers refuse to process gambling transactions.
Commenting on that issue, Kresimir Spajic, SVP and MD Online Gaming and Sports Betting at Hard Rock, noted that in Europe around 80% of all sports betting transactions are financed via credit cards, compared to about 30% in the US.
Source: Gambling firms see $7B to $8B sports betting market by 2025, Yahoo! News
Follow us on Facebook and Twitter to stay up to date on the day’s top casino news stories
