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US sports betting: H2 ‘deep dive’ analysis

| By Stephen Carter
iGaming Business exclusively presents principal data partner H2 Gambling Capital's analysis of the current and potential US sports betting market

During the summer of 2017, the sector's leading market data provider H2 Gambling Capital undertook a 'deep dive' quantitative and qualitative analysis of the US sports betting market, assessing its current size and potential based on an 8-10 year roll-out. Here we present the full report, exclusive to iGaming Business

Headline findings
1. Global sports betting has grown from $41.6bn to $58.9bn GGR (or $1.2tn handle) over the last decade (2006- 16) – with online growing at 10x the rate of all land-based activity
2. In comparison, US sports betting has declined by -2.8% CAGR over the same period – from $5.2bn to $3.9bn GGR (or $78bn handle)
3. H2 does not track black market activity as standard, but has calculated the 2016 US illegal (grey and black) market to be $196.2bn handle (or $10.4bn GGR) – significantly higher than the $150bn handle figure currently published by the AGA (American Gaming Association)
4. As context, this number is over 47x the current US legal sports betting market, or nearly 1.5x the total handle for all gambling taking place on the Nevada Las Vegas Strip in 2016
5. This analysis means that 97% of all US sports betting in 2016 was ‘illegal’
6. If PASPA is repealed, H2 estimates an 8-10 year roll out until a regulated US sports betting market reaches its full potential – defined by a ‘European style’ land-based and online offer covering c18 States, and valued at between $6.1-$7.9bn GGR
7. In viewing the future of US sports betting in advance of the New Jersey Supreme Court case, H2 found that most operators feel just repealing PASPA isn’t enough. The strong desire is for a fresh approach to new US legislation with a core Federal regulatory template that sets out the highest level of operator requirements

H2 concludes that the US has a unique opportunity to put in place a ‘gold standard’ regulation for sports betting if it chooses to, evolving the sector further, and drawing on key lessons learnt by those markets that have gone before it.

You can read the full report below, which is best viewed in 'full screen' mode by clicking the second button on the left within the e-reader.

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