Like a holiday that lasts half the year, NFL betting season is back in the United States.
NFL betting kicked off last week, ushering in a six-month stretch of nonstop sports and gambling opportunities that will rise to an unprecedented level this year. NCAA college football is also underway, with basketball and hockey ready to arrive at the end of the baseball season. There is even a week in late October where all four major US sports will be in action simultaneously.
Sportsbooks are more eager than ever to capitalize on the peaking interest around pro and college football betting, entering what will be their busiest months of operation to date.
Pace of the game so far
July reporting spurred US sports betting handle across $250 billion since its expansion in 2018, and the growth phase is still ongoing.
Volume for H1 2023 alone surpassed $55 billion, up 23% from last year’s pace through the first six months. Increased activity stems from both the simple addition of new states as well as a number of product improvements aimed at making betting more enticing to the casual player.
On a same-state basis, 2023 is tracking just ahead of 2022. Month-to-month trends and the broader market dynamics suggest some room for additional growth this fall.
Big push to close 2023
At the current rate of growth, US sports betting is on pace to generate around $110 billion in handle and $10 billion in revenue for the calendar year. Both of those numbers will be new records.
There is good reason to be optimistic about cashing the over.
Growth in the largest and newest markets has so far offset any negative effects felt by those that are maturing, creating an overall net positive trend for the US heading into the busy season. Kentucky’s contribution will help pad the numbers for the last few months, and the addition of new brands and products figures to reignite some flickering embers all over the map.
Expect betting handle for the year to approach $120 billion by the time the calendar runs out on 2023, almost half of the total from the past five years combined.
NFL betting map continues to grow
A couple of key states are gearing up for their very first football season with legal sports betting.
Ohio already demonstrated its potential to become a top-five market as it continues to ramp up from an inspiring launch in January. Spring and summer have been steady too, but the coming months will provide a better sense of the true ceiling for Ohio sports betting. It is one of only four legal states with two home teams in the NFL.
Massachusetts does not have the population to be a top-five market, but it has shown similar strength through the first part of the year. Again, the coming football season provides the proper yardstick with which to measure Massachusetts’ position on the overall power rankings.
More new states are coming online this season, too.
Kentucky sports betting ready to run
Kentucky already filed into the starting gate, set to add sports gambling over top of its existing horse racing industry. Sports betting windows open at some tracks today, and online betting apps will roll out statewide on September 28.
It is an awkward moment for Churchill Downs, which first rebranded and then abandoned its own online sports betting product, just in time to see legalization arrive at its doorstep. It will instead partner with three of its former digital competitors to facilitate their entry into the state.
Kentucky sports betting should produce close to $1 billion in handle and $100 million in operator revenue between now and the end of the year.
Super Bowl betting in North Carolina?
North Carolina is meanwhile poised to pair commercial online betting with its tribal retail industry under a law passed earlier this year. As the fifth-most populous state with legal sports betting, it will have a significant impact on the national totals right from day one.
Unfortunately for Tar Heel bettors, Day 1 won’t arrive until at least January 8, 2024, about a month before the Super Bowl. But revisiting this same conversation a year from now will no doubt find NC sports betting as one of the focal points.
Maine, Nebraska (retail-only), and Vermont are additionally legalized pending launch, with no firm timeline as the football season begins.
Betting on a big NFL season
Map expansion creates a natural headwind for neighboring states with legal industries, and some markets have indeed slipped as they mature. The two biggest ones, however, are still putting on a fine show in 2023.
New York has really hit its stride, growing 7% from H1 2022 in its first six months with legal online betting. The biggest days of NY sports betting are still yet to come, with monthly volume likely to flirt with $2 billion by the time winter sets in.
Illinois sports betting is in a similar period of sustained growth, tracking up 14% from last year. It is now the clear number two market in the country ahead of New Jersey, a position it will continue to fortify with another streak of billion-dollar months on the horizon.
Considering these two states account for more than a quarter of all sports betting nationwide, their performance during the busy season will shape the national totals.
Product better this time around
Sportsbooks have also had a full year of product development to prepare for this stretch, and the results are evident.
Bits of data scatted throughout the reporting shows bettors are generally becoming more engaged, more willing to speculate on smaller sports, and more eager to bet into long odds. At the same time, they are less profitable.
Developments in product are especially apparent on the revenue side of the reports, where operators are currently pressing the edges of a double-digit hold that seems to be perpetually on the rise. Sportsbooks, like casinos, continue to find better ways to participate in parlays that create a tougher path to profit.
In that vein, both Bally Bet and Caesars recently refreshed their betting apps in an effort to make them more relevant this fall than last. Don not overlook the sleeping giant that is bet365, which seems to be stirring in its den with a best-in-class product out front.
Meanwhile, the roster of active brands is also expanding in the most meaningful way since 2018 with the additions of Fanatics Sportsbook and ESPN Bet.
New challengers enter the app arena
Fanatics Sportsbook has already been live for a few months in some markets as it works through the transition from its PointsBet purchase, but it waited until football season to make its grand entrance. It is available in 11 states as one of the most prevalent brands in the country, albeit still sharing the spotlight with PointsBet in a number of them.
It is too early to know if the sports memorabilia brand can compete as a sports betting brand, but the financial resources Fanatics has at its disposal are almost unmatched in the industry today. Its $31 billion valuation is larger than the current market cap of FanDuel parent company Flutter.
ESPN Bet is also warming up for its debut as the brand Penn hopes will reverse its fortunes in the sports betting vertical. Skeptics have plenty of cause, but some believers think ESPN Bet has a real chance to bite into the leaders’ share and perhaps even expand the overall pool of bettors in otherwise-saturated markets.
Brace yourselves for NFL betting ads
The addition of these two big brands into the equation should drive increased NFL betting volume and bring more ammunition to the advertising wars over the coming months. Both will ultimately be active in at least 18 states to rival the footprint of the leaders, and both are well-capitalized for customer acquisition.
Cast a skeptical eye toward operators who say they are tightening their marketing budgets. It is a convenient thing to tell budget-conscious investors, and it was factually true for the recent quarterly reports that dropped during the slow part of the calendar. Data shows that the leaders eased off the throttle in maturing markets through the first half of the year.
Looking at promotional outlay only tells half the story, though.
Overall sports betting ad impressions are actually up 25% this year according to tracking from iSpot. Mirroring the national market share picture, FanDuel and DraftKings combine to account for more than two-thirds of those impressions. It would be counterintuitive for them to forfeit that visibility during this prime time for acquisition, particularly now with two big competitors joining the fight.
Operators might be exercising more ‘discretion’ about marketing spend, and they are certainly working to transition to a more sustainable business model over time. But football fans should expect an all-out advertising blitz to continue for at least one more season.