The pandemic has altered the behavior patterns of many Americans. It has also forced states to re-examine their thinking in several areas, especially in taxation and spending. One of the biggest winners in this process appears to be gambling.
Clearly, with most of the nation's leisure activities shut down, more and more Americans are looking for something to occupy their time. At the same time, thanks to massive losses in tax revenues, states are scrambling for ways to make ends meet. Sports and other forms of online gambling are an easy answer to shoring up state budgets, while satisfying the consumer's demand for more action in this burgeoning leisure market.
The trend toward legalizing gambling both on and off the internet has been around for the last several years, but the pandemic has added momentum to that process. Back in 2017, the U.S. Supreme Court ruled that states have the right to decide the status of sports betting for themselves. As a result, more than 24 states have legalized betting either online or at casinos or both.
Sports betting is only the latest offering in a field crowded with other gambling pastimes. Whatever your poison — poker, slots, sports betting, or live casino games — you can increasingly access it online. More and more Americans are doing just that.
For those veteran gamblers who enjoyed the excitement of the brick-and-mortar atmosphere of established gambling casinos, it took the pandemic to lure them onto the internet side of things. They found that online sites offered their own brand of adrenaline rush. Slot machines, for example, tend to be much more fun than the traditional, one-armed bandits of yesteryear. If that is not your cup of tea, you can access live studios where the game and dealers are in real-time and the light shows are often dazzling.
Another benefit of online sites is safety. Gamblers can feel safe because there are plenty of reliable websites that have been licensed by the state. They offer a transparent and fair game with high-security protocols. They are also open 24 hours a day, and you don't need to wear make-up or comb your hair to gamble. In addition, there are no lines, social requirements, expensive dinners, hotels, or worries about costly transportation to the casino.
The nation's attention was drawn to sports betting last weekend thanks to the Super Bowl. Wagers on the game were expected to break all records in legal sports betting. The American Gaming Association predicted that as many as 23.2 million people would be wagering bets on the outcome of the game. That would be a 62 percent increase from last year's wagers, totaling $4.3 million.
The nation's media featured a Texas businessman and owner of a furniture store, "Mattress Mack" Jim McIngvale, who placed a $3.46 million bet on the game and won $6.18 million. It was thought to be the largest bet made at the game.
Mattress Mack placed the bet on his smartphone through DraftKings (DKNG), a public company that is one of the top betting platforms in the nation. The publicity has been good both for the furniture store as well as for the price of DraftKings. The company's stock price has climbed substantially over the last few months as investors became aware of just how large the betting public has become.
Worldwide, the online gambling market is valued at $59 billon, according to Statista, a data research firm, and is expected to reach $92.9 billion by next year. That has investors excited. And like so many other areas affected by the pandemic, gambling could become even bigger in the future with online betting leading the way.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at email@example.com.
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