Sports betting is all about trying to predict the future. Who’s going to win? How many points will they win by? And will Raheem Mostert find the end zone?
I, however, spend most of my professional time watching gaming commissions and state legislatures, not the oddsboard. The business, regulation, and legislation surrounding sports betting are a bit different, but, as with wagering, correctly predicting the future can result in handsome profits.
Oftentimes, these predictions can be boiled down to one question: who’s next? As in, which state or province will next launch legal online sports betting?
Still, there are more predictions to be made, especially as the gaming industry evolves. Who will win? Who will lose? And who will survive?
As the year winds down, I’ve had some time to reflect on what’s happened and what may happen. Here, then, are my predictions for 2024, based on the things I’ve heard, the things I’ve seen, and the things I just think. They are by no means guaranteed — there are no locks in this game — but I guarantee you’ll enjoy reading them at least.
California will NOT legalize sports betting in 2024
Having lived through the Great Ballot Box Battle of 2022, I already had a dim view of the prospects of any sports betting-related measure earning California voters’ approval in 2024. That was even before we entered the current state of play, which is rather bizarre.
Two initiatives have been proposed aiming to legalize sports betting thus far, and both are aimed at giving the state’s Native American tribes control. Somehow, though, these proposals caught many of their purported beneficiaries unaware, kicking off the process on the wrong foot and earning the near-immediate opposition of California’s gaming tribes.
The California Nations Indian Gaming Association recently reaffirmed its stance against the two proposed ballot measures. What that means, then, is that the group that was so effective in scuttling an online sports betting measure in 2022 is now poised to fight at least two initiatives again in 2024 if they even make it to the ballot. The odds of success are not good, in my opinion, and that's before you remember that California voters resoundingly shot down two other sports betting-related initiatives a year ago.
Catching up on some stuff from last week this morning, starting with the California Nations Indian Gaming Association again formally opposing the two proposed sports betting ballot measures, even with their recent amendments:https://t.co/7qxT8fLzMQ pic.twitter.com/B5C04YP0RU
— Geoff Zochodne (@GeoffZochodne) December 18, 2023
Texas will NOT legalize sports betting next year either …
… because the Texas legislature will NOT meet in 2024 unless the governor calls for a special sitting. Also, to legalize sports betting, that special sitting would have to be solely about authorizing event wagering in the Lone Star State. Typically, however, the Texas House of Representatives and Senate meet only in odd-numbered years. That means one of the great untapped markets in the U.S. will likely remain off-limits to online sportsbook operators for another year at least. This doesn't count as a prediction.
But Vermont WILL launch online sports betting
OK, yes, I’m still trolling. This is more of a certainty than a prediction (so I'm not counting it as a prediction either) but I’m putting it in here anyway. Vermont is launching online sports betting on Jan. 11.
Delaware will be the next state to legalize online sports betting (but Mississippi may not be far behind)
Speaking of Vermont, I spent the fall and early winter of 2022 watching a handful of people sit around a table in Montpelier discussing the ins and outs of legal sports betting. After much discussion, a study committee recommended that Vermont legalize sports betting and that it do so with between two to six online sportsbooks. Those recommendations were largely taken and incorporated into legislation that was passed this year and now forms the bones of Vermont’s soon-to-launch online sports betting system.
Why do I bring this up? Well, because Delaware and Mississippi engaged in a similar process this year, with two respective state task forces doing the homework that will likely inform debates around legalizing online sports betting in the upcoming legislative sittings. The recent report from Delaware’s “Internet Sports Lottery Legislative Working Group” even flat out stated that the state “needs to have an online sport lottery” and that it “needs to have multiple online sports lottery operators (skins).”
Not much room for misinterpretation there. Delaware and Mississippi also have legal sports betting already at brick-and-mortar casinos (and, in Mississippi, you can use mobile apps on the property of certain gaming facilities); it’s not a huge leap to add a statewide mobile option.
bet365 will emerge as a real player in online sports betting in the U.S.
Much has been said and written about the potential of ESPN BET and Fanatics Sportsbook, especially about the challenge they pose to the online sports betting duopoly of DraftKings and FanDuel. I know this because I’ve personally said and written a fair amount on the subject myself.
However, my take is that the real threat to the DraftKings/FanDuel monster is bet365, not these newer names, and that we will all start to twig to this fact in 2024.
Let’s start by looking at ESPN BET and Fanatics. Both operators bring intriguing non-gaming assets to the table, namely, the media empire of ESPN and the massive customer database of Fanatics. But, in short, I think the same non-gaming assets that make ESPN BET and Fanatics intriguing will be stifled somewhat by forces beyond the control of the operators.
For example, we saw in Massachusetts that regulators were a tad uncomfortable about the proximity of ESPN’s journalism and the sports betting-related content it is flinging at viewers. That leeriness is not exclusive to the Bay State, surely, and the public’s trust in media in general is low, which may not bode well for a sportsbook flogged by a prominent media company. Fanatics, meanwhile, has faced pushback from at least one regulator for offering a free bet in connection with the purchase of merchandise.
But bet365 has been moving quietly, like a gator in the swamp with its eyes just poking up above the waterline. The operator is now taking action in seven U.S. states, including Kentucky, New Jersey, and Ohio.
It’s also carving out a decent share of the market for itself without much ado. In Kentucky, which only launched online sports betting in late September, DraftKings and FanDuel have generated 36% and 37% of gross gaming revenue, respectively, thus far. Yet bet365 “has emerged in a strong third position with 16% share,” analysts at investment bank Jefferies wrote recently. And, in Ohio, bet365 took more in online bets in October ($45.7 million) than long-running third-wheel BetMGM ($45.4 million).
bet365 has been very targeted with its U.S. ambitions. It tried and failed to obtain an online sports betting license in New York, but that may have been a blessing in disguise, as the state’s 51% tax rate makes turning a profit there a serious chore. bet365 then dipped a toe in the waters in Massachusetts before deciding to take a pass on the Bay State. However, the recent launches in Kentucky and Louisiana show the U.K.-based bookmaker intends to stick around in the U.S. for the foreseeable future. It also recently struck a partnership with the NBA's Charlotte Hornets for access to North Carolina's online sports betting market.
Furthermore, as a private company, bet365 doesn’t have to worry about an army of shareholders demanding growth or profits or both or neither at any given moment. bet365 can afford to be patient and I think by this time in 2024 we’ll recognize it as a true player in U.S. sports betting, if we haven't already.
The official press release: the Charlotte Hornets and bet365 are now partners, providing the bookmaker with a way to access the North Carolina online sports betting market that will launch in 2024: pic.twitter.com/f2JUGnA2js
— Geoff Zochodne (@GeoffZochodne) November 17, 2023
‘Sharp’-focused sportsbooks will gain traction
The standard operating procedure in the online sports betting business is seemingly this: If you bet a lot of eight-leg same-game parlays and lose, you can wager as long as you like; if you bet a lot on straight bets and you win them, you’ll be limited or shown the door. For a lot of sharper bettors, this means the trouble isn’t picking winners, it’s getting someone to take a decent-sized bet at all.
But if you can’t wager with regulated sportsbooks in your state or province, where are you going to go? Analysts with JMP Securities wrote recently that offshore bettors accounted for 65% of online sports wagering in the U.S. and 37% of tickets during November, which means the bulk of action is being handled outside of regulated channels.
“Sharps/whales (more educated bettors) are getting boxed out of the legal market as gaming companies have improved technology, and these players are migrating offshore at a higher rate compared to pre-2021, targeting faulty lines and fewer restrictions,” the JMP note to clients stated.
The American gaming industry is pushing for a crackdown on lingering forms of illegal gambling but it hasn’t quite happened yet. Furthermore, people are betting more on sports in the U.S. every day, and every day, they are learning how to get better at it, meaning they may become sharper bettors. Based on this and the above, it’s clear there is a sizable population of sharper bettors looking for someone to take their action.
That’s why I think 2024 will be a year where we see a sharper-friendly form of sportsbook gain traction. Frankly, I think the industry NEEDS these sorts of sportsbooks to save operators from themselves. If winning too much means you can no longer bet, or bet a decent amount, then the premise of sports betting becomes a lie. You can’t win, you can only lose, and who will keep wagering then?
We’re already seeing some green shoots for the sharper book model. In Ohio, “America's sharpest sportsbook,” Prime Sports, took $366,001 in online bets in September in the state, the operator's first month active there. In October, Prime’s handle in Ohio was more than $2.3 million, with zero free bets or other promotions offered to customers. That was more than Betr, the Jake Paul-backed online sportsbook, Betfred, Betway, and Bally Bet. Circa Sports continues to expand its presence as well, with a Kentucky launch still on the horizon.
Set the limits, take the bets, and move the number. Adjust the limits, take more bets, and move the number again. I think it's a model that can work for some companies, albeit not all.
Lawmakers in Georgia, Minnesota, and Missouri will once again introduce bills to legalize online sports betting
They’ve done it before and they’ll do it again. The list of states without legal sports betting is getting shorter every year, and it seems like Georgia, Minnesota, and Missouri are perpetually in the running to shorten it further. For various reasons, though, lawmakers there have been unable to concoct a formula for getting a sports betting bill across the finish line.
Georgia has seen voting rights legislation and debate over the necessity of a constitutional amendment scuttle previous efforts; Minnesota has a recurring tug-of-war between tribes and tracks; Missouri has one guy holding up the process because video lottery terminals aren’t part of the deal.
But 2024 is another year and another perfect time to try again. We’ve already heard rumblings that another legalization push is coming in Georgia. In Missouri, the state’s professional sports teams are working on an end-around the legislature, which could prompt at least one legislator to try to beat them to the punch. Minnesota Gov. Tim Walz remains a sports betting supporter as well. I think we’ll see all three states give it another go in 2024.
Alberta will move closer to an Ontario-like system for sports betting, but Quebec won’t
A lot of time and energy is being spent by operators to rally support for a competitive market for online sports betting and casino gambling in Quebec, like the one in Ontario. Indeed, a coalition formed by several members of the gaming industry is commissioning polls and lobbying lawmakers to get on board in Quebec, Canada's second-biggest province by population. I don’t think it’s going to happen, at least not next year.
Quebec’s government-owned lottery and gaming corporation is the sole legal operator of online gambling in the province, and it is not happy with some members of the private-sector coalition, which it accuses of already taking wagers in the “grey” market. In Ontario, the provincial government said it wanted a competitive market and the lottery accepted this fact and even embraced the competition as motivation to improve its offerings. The same climate does not exist in Quebec.
An updated list of online sportsbooks that are live in Ontario's regulated market:
— Geoff Zochodne (@GeoffZochodne) December 13, 2023
-888
-bet365
-Bet99
-Betano
-BetMGM
-BetRivers
-Betsafe
-BetVictor
-Betway
-bwin
-Caesars
-Casumo
-DraftKings
-FanDuel
-Fitzdares
-LeoVegas
-Neobet
-NorthStar Bets
-Partysports…
Alberta, however, is a different story. There, the province has made online gambling reform part of its mandate, meaning its government-owned gaming company could be in for some regulated competition of its own. Online sportsbook operators have been in talks with the Alberta government about this, even if there are a lot of cooks in that kitchen trying to provide input. In short, the vibes are ripe for change, and I think we see momentum in 2024 in Alberta for an Ontario-like system of online sports betting and casino gambling.
The going will remain slow for U.S. iGaming
It’s been much easier to legalize sports betting in a state than it is to legalize online casino gambling. I think that remains the case in 2024 for a few reasons, one of which is that it feels like operators want it to happen more than the general public. People watch sports, they love sports, they love betting on sports, and online sports betting is a more generally accepted form of entertainment than iGaming. Case in point: 38 states have legalized some form of sports betting, while just seven have done the same for online casino play.
You could just say that there is something about iGaming that is not sitting right with lawmakers. There are also lingering concerns about iGaming that the industry can’t shake. I referenced Mississippi’s “Mobile-Online Sports Betting Task Force” above, and their recently released report notes one of the concerns about legalizing online sports betting is that it could pave the way for online casinos.
“While online gaming offers the potential to bring in more tax revenues than sports betting, such revenues may be offset due to the cannibalization of casino retail business and decline in retail casino operations,” the report states.
We're also still in the early innings of legalized sports betting in the U.S. Lawmakers are only just starting to revisit the issue and even then it's usually regarding advertising or taxation. There are only so many hours in a legislative day to deal with gaming-related issues, and iGaming is lower on the list of priorities.
Maybe there will come a day when states are legalizing iGaming in the relatively rapid way they have sports betting. I’m not sure it’s going to happen next year.
Sports betting legalization will flop in Oklahoma
Does no one send emails anymore? Are people totally against the idea of picking up the phone and giving someone a heads-up? I ask because Oklahoma Gov. Kevin Stitt recently unveiled a plan to legalize sports betting in his state, somehow without consulting the Oklahoma Indian Gaming Association about it at all.
That, to me, seems like a recipe for failure in Oklahoma, where sports betting-related legislation has failed before and where the tribes are a huge economic force. For example, one of the largest casinos in the world is in Oklahoma, the WinStar World Casino and Resort, and it is owned and operated by the Chickasaw Nation.
Stitt, meanwhile, is proposing a model that would allow the tribes to offer retail sports betting but then have a state-licensed system for mobile wagering. While details are limited at this point, that limited vision seems like it could provoke some opposition from the tribes.
More jurisdictions will explicitly outlaw pick'em-style DFS
Look, life's not fair. It is, frankly, very unfair at times. And so it may seem to the PrizePicks and Underdog Fantasys of the world, the pioneers of pick'em-style daily fantasy contests played against the house that have been targeted by state regulators and singled out as unauthorized sports betting. This is despite those operators relying on laws that helped the likes of DraftKings and FanDuel, which the pick'em providers now accuse of driving the regulatory crackdown.
I think that crackdown will continue in 2024. The seeds have already been planted in some states, including California, Colorado, and Virginia. North Carolina flirted with the idea before backing down to keep things simple ahead of its online sports betting launch early next year. DraftKings and FanDuel are also looking to the states to take a stance on the issue, and they are the two biggest online sportsbook operators in states that have legal sports betting. That could make them very persuasive.
And while it may strike pick'em providers as a lazy argument — and it may just be — regulators and lawmakers could have a hard time distinguishing a same-game parlay from a pick'em lineup. To the uninitiated, it looks a lot like sports betting. That alone could keep the heat on pick'em providers and force them to adapt to survive.
when you are feeling good about the legality of your online sportsbook and want to let people know about it: https://t.co/LrlDRuqXsa
— Geoff Zochodne (@GeoffZochodne) December 7, 2023
Florida will continue to Florida
If that last question didn't give it away, full disclosure: I'm not a lawyer. If you made it this far, though, bear with me for this one last prediction about the Sunshine State, where legal sports betting was relaunched in November after about two years of courtroom combat.
In short, I have a hard time seeing the status quo undone in Florida in 2024, but I don't know for sure that it will stand the test of time. That's for the courts to decide. In the meantime, Hard Rock Bet will continue to take bets as the state's only online sportsbook and the Seminole Tribe will have control over event wagering in the state. That's what the governor wanted, that's what the legislature approved, and that's what the courts are allowing.
But, by launching in-person sports betting and relaunching online sports wagering, the Seminole sent a definitive message about how confident they are in their legal standing. Although we're seemingly doomed to get lengthy legal filings about Florida sports betting every Friday at 4:59 p.m. ET until the sun burns out, it's hard to undo what's already been done, again.
