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The American Gaming Association (AGA) has released a sports betting survey commissioned from Nielsen Sports that concludes legal sports betting will bring benefits to teams and fans, as well as operators.
State tax coffers will also get an upside as bettors switch from offshore sites to the regulated — and taxed — market.
According to the AGA, Nielsen “conducted a custom survey of 1,032 U.S. 18+ adults, representative of census age, gender, geography and ethnicity, from May 15 through May 31, 2018.”
One of the survey’s most significant findings was that 71 percent of bettors currently wagering “with a bookie” will move “some or all” of their betting to the regulated market if they have access to “a legal platform.”
The UK Gambling Commission (UKGC) estimates that it captures over 95 percent of all sports betting in the legal market. In France, roughly 40 percent of sports betting still takes place at unlicensed sites. That 71 percent figure is therefore worth a closer look.
There are factors that can push the number higher or lower. A study by Copenhagen Economics commissioned by the Swedish government found a direct correlation between the level of gambling taxes and the proportion of players captured by the regulated market.
From this perspective, New Jersey, where the online sports betting tax rate of 13 percent is even lower than the UK, should reach much more than the 71 percent suggested.
Over time, as sports bettors are exposed to more NJ marketing, the proportion of bettors in the regulated sector should reach similar levels to the UK.
Pennsylvania is in a different position. Its sports betting taxes have been set at 36 percent, so it can expect figures closer to those in France, i.e. around 60 percent of betting activity in the regulated sector.
That has big implications for the amount of taxes the states will collect. New Jersey’s lower tax rate could just bring in more taxes than Pennsylvania. We’ll have to wait and see.
The research examined how betting habits of fans will change following the availability of legal sports betting.
Currently, 19 percent of NFL fans engage in sports betting. The survey found that this would increase to 31 percent with legalized sports betting. The results were slightly lower, but similar for the NBA, MLB and NHL.
Sara Slane, AGA senior vice president of public affairs, commented on the study results:
“The Nielsen Sports data supports what we’ve long expected: access to legal sports wagering will increase fan engagement in major sport contests and enable a significant revenue generation opportunity for major sports leagues and teams.”
On average, the survey found that sports bettors are younger and more affluent than other sports fans.
The proportion of fans with six-figure incomes is substantially larger among sports bettors and casual bettors than in non-bettors. Bettors are also younger. Many more of them are in the millennial generation.
“Expanding access to legal sports betting will bring millennial audiences back to sports broadcasts and stadiums, which is a huge benefit for sport enterprises across the country. However, this potential will only be realized with proper policy frameworks that empower consumers with competitive odds, access to all bets and the ability to tap into modern platforms including mobile. Without this focus on consumers, the illegal market will continue to thrive.”
Finally, the survey determined that sports bettors are a more diverse group than the average sports fan base.
In June, Morning Consult conducted an online survey which came up with very similar results to Nielson’s study.
“Prospective bettors are more likely to be age 34 or younger than current bettors (38 percent vs. 30 percent) and more likely to be making less than $50,000 in annual income (56 percent vs. 46 percent).”
The AGA will follow up its report with another which “will estimate the amount of revenue this demographic can help unlock for the major U.S. sports leagues.”
Now that the first revenue figures are in from sports betting in New Jersey, that estimate should be more than just speculation and actually have some real data to back up its forecast.