Gambling

Deutsche Bank Sports Betting Outlook Practical, Though Encouraging


Posted on: September 28, 2022, 02:49h. 

Last updated on: September 28, 2022, 02:49h.

In forecasting August gross gaming revenue (GGR) of $510 million for domestic sportsbook operators, Deutsche Bank sounded an optimistic tone on the state of the US regulated sports wagering in an expansive 47-page report.

Deutsche Bank sports betting
The sportsbook at Red Rock Resort in Las Vegas. Deutsche Bank is bullish on US sports betting. (Image: Red Rock Resort)

Assuming it’s accurate, that August figure is solid considering the eighth month of the year lacks NFL regular season action and offers just a smattering of college football games in what’s known as week zero. The bank adds that in states that were live with sports betting for all of July and August, related GGR likely jumped 26% month-over-month due to stronger hold.

For the states were operational in both July and August, Deutsche Bank estimates a 62% year-over-year increase in handle and a 3.7% jump in hold from the year earlier period. Based on those projections, sports wagering revenue in those states surged 138% year-over-year.

Legislative Outlook Matters

Deutsche Bank estimates that by 2027, the US sports wagering industry will be generating at least $12 billion in annual revenue.

That’s light relative to some forecasts that were bandied in the industry’s goo-go days of 2020, but the projection is also based on some crucial legislative assumptions.

By 2027, the bank estimates 79 percent of the US adult population to have access to legalized sports betting,” according to the bank.

Currently, sports betting is live and legal in 31 states and Washington, DC with Ohio likely to join the party in January 2023. However, not all of those states — Washington State a prime example — allow mobile sports wagering, meaning handle and tax revenue in those jurisdictions is significantly lower than in states embracing internet sports betting.

Not included in that 31 are the “holy trinity” of California, Texas and Florida. Deutsche Bank says it’s being realistic about sports betting in the three largest states. However, there’s an above-average chance what happens in the real world doesn’t mesh with the bank’s outlook.

On Election Day, California could test and prove that thesis. If the tribal-backed Proposition 26 wins and Prop 27 fails, the largest state in the country could be without online sports wagering for years. Some tribal leaders are open about their desires, noting they simply want to offer retail sports betting as an avenue for luring customers to land-based casinos.

As for Texas, barring surprising results there on Election Day, it’s unlikely sports betting will be a legislative priority there in 2023. Florida is somewhat of a different situation because online betting was briefly allowed there before being halted by courts, but it’s believed that the issue of gaming expansion in any form must be put directly to voters.

Deutsche Bank Optimistic on Sports Wagering Spending

Deutsche Bank estimates that for states that live and legal for all of 2021, sports betting spending could notch a compound annual growth rate (CAGR) of 4.6% from 2022 through 2027.

Obviously, levels of spending on sports betting vary based on income, but the bank indicates New Jersey serves as a solid forecasting template.

“If New Jersey per adult spend base is ~$100, and New Jersey household income is $82K, we would assume a per adult spend of ~$50 for a state with average household income of $41K that offers mobile sports betting or mobile and retail sports betting,” according to the bank.



Source link

Back to top button