Global sports betting is a 104 billion dollar undertaking. In the US alone, sports betting black market is estimated to be up to more than $10 billion. Regardless of which estimation is right, the prospects for the industry are immense and, most specifically, for casinos, they are about to become legal and large.
A recent ruling by the Supreme Court overturned a ban on lawful sports betting at state level in 1992. And now that massive black market is about to become legally up for grabs, as states legalize sports betting. After the supreme court decision, casino stocks soared to hunger for the chance to become the market’s top sports bet player. Sports betting as it is is small, but as the market grows we see an opening for a marketplace to grab the market’s lion’s share.
Online Sports Betting as a Business Platform
We’re not the only people that think so. ZenSports launched a peer-to-peer sports betting site in September 2018 that works outside the US, Canada and Europe. Apps on the network either become bet-makers or bet-takers. Since there are no bookie setting risks, the odds tend to be better. Standard bookies stack odds that benefit themselves as part of a strategy to hedge (and to make profit). ZenSports then takes a portion of all the bets transacting on the website.
Even before the decision of the Supreme Court in May 2018, casinos and jurisdiction in the United States where sports gambling is legal could have run on their properties a site such as ZenSports. A casino-run betting platform’s advantage is that the casino offers bettors with a way to place bets on activities that the player doesn’t want to bet on itself. The casino also earns a transaction fee, and receives details on gaming patterns and preferences in turn.
The betting network could even extend where appropriate to other event-type betting such as award shows, political events, and other cultural moments (more on that further down). For example, the legal sports betting industry in the U.S. was limited (lawful sports betting was only worth $270 million in 2017) and would-be betters had to fly on-site to lawfully place bets. At the opportunity to build a peer-to-peer betting network, casinos might be forgiven for not jumping.
But now, in regulated sports betting, we’re in the midst of a sea change, and the need for a peer-to-peer gambling network has become a logistical necessity for all casinos. According to Bloomberg, the Supreme Court decision of May 2018 opens up a market for sports betting that alone could be as high as $4 billion. This figure is placed on the conservative end of predictions by our analysis.
Legal Sports Betting
Since the decision of the Supreme Court in May 2018 to reverse a ruling of 1992, which had barred states from allowing sports betting, it has been legalized by 7 jurisdiction. New York is semi-legal and on the cusp of full legalization, and a further 14 states have proposed legislation to allow sport betting. The time for a conventional casino to develop a betting site is perfect, until ZenSports figures out a way to make correct geo-fence bets by territory. Or, DraftKings, Betstar, and FanDuel online sportsbooks figure out a way to allow peer-to-peer gaming on their websites and apps.
Although ZenSports on the technical aspects of a peer-to-peer betting site may be ahead of conventional casinos, it lacks the institutional knowledge, brand recognition, and data that casinos have on sports betting. Once a casino builds a platform, this competitive advantage might be worth more than the technical product, or they could simply buy ZenSports.
Whoever builds a betting platform can easily expand that platform to include residents of states who have opened up betting laws. Nonetheless, time is of the essence as a sports betting company, like all network business models, winner wins take all conditions in which one or two winners dominate the competition (e.g. Uber / Lyft, Apple / Google app store, or Tencent / Alibaba)
There are two additional points to make on the betting network. Second, it is also easy to add non-sports bets during award shows, game shows, political events, and other cultural occasions, laws permitting. And there’s reason to be optimistic that non-sports betting limits will relax too. New Jersey, for example, has agreed to only allow pre-event wagering for the 2019 Oscars. New Jersey’s tentative experimenting with Oscar betting (which is still illegal in Nevada and opposes the Academy) seems to signal a desire to consider various types of regulated betting that can open up more opportunities for the betting market owner.
Third, it’s just the US sector that is a $4 billion market. According to a research by Zion Market Research, “the global sports betting market was estimated at around USD 104.31 billion in 2017 and is expected to reach about USD 155.49 billion by 2024, rising at a healthy CAGR of 8.83 per cent between 2018 and 2024.” An online betting site will cross foreign borders (as Zen Sports does) as long as it complies with local laws.
Both domestically and abroad, the opportunity is immense. Owners of big casinos like MGM. Caesar’s, the Sands, Crown Resorts etc. are well placed to contend against businesses like ZenSports, DraftKings, and FanDuel because they can offer a better price than online-only firms. Local casinos may provide premium promotions and reward bundles for their physical locations, such as discounts on network bettors ‘ watching party passes, and offers on other gaming items, such as table games and slots on-site and online.
And that opportunity is as good for the bettor as it is for the casino. It is possible to make interesting and unusual bets on a peer-to-peer betting network, bets that casinos would not necessarily wish to make. Betters can use the website to find counterparties for a small fee and have a good time betting on some of the more obscure elements of sports too.