November 3, 2021
Sports betting is finding high-level support on the investment front. In June, NASDAQ threw its hat in the ring by taking a stake in sports betting and providing surveillance technology to sports betting partners. In using an exchange model, some analysts predict the sports betting market could grow to $37 billion in value by 2025.
NASDAQ is not alone. Hudson River Trading and Tower Research are also investing in the sports betting market. As the market grows, competition will heat up between liquidity providers, sparking better odds and pricing. As more brokers enter the market, they may attract investors who are both sports fans and interested in high-reward opportunities.
Innovation is key to making the market transparent and safe. With emerging technologies, exchange operators may open the door for states to regulate the industry. Presently, thirty states allow legal sports betting. New York, California, and Florida officials are exploring the best ways to launch sports betting within their respective states.
Sports betting is evolving into an accepted form of entertainment by more than 60 percent of consumers. Since the 1940s, the mafia controlled sports betting, and consumers gambled on an unregulated market. As the evolution of the internet continues to provide privacy and anonymity, the market is growing exponentially, leaving greater opportunities for disreputable platforms.
States are stepping in to regulate the market and to receive substantial tax revenue. Casinos in 40 states generate billions in tax revenue and support close to two million employees. Americans wagering illegally spend up to $500 billion and growing yearly.
If a state makes 2 percent or more of the yearly casino revenue, it may use those funds to bridge budget shortfalls and support schools, infrastructure, and other legislative priorities. The economic impact is projected to infuse much-needed cash into retail and other business establishments.
For the governments, the dual benefit of raising money and protecting citizens is attractive. With no loss limits on some sites, new regulations may protect consumers who have relied on unregulated environments to place bets until recently. State-governed sports gambling markets may require casinos and sportsbooks to impose limits to betting and monitor gamblers for risky behaviors.
Technology may easily recognize and notify the establishment on digital platforms when a gambler is exhibiting addictive tendencies. These measures are the first steps in bringing sports betting out of the shadows and into the mainstream.
Players are excited about the new changes to gambling laws, impacting the accessibility and legality of sports betting. For this reason, leagues support the measures, which are sure to increase audience engagement in specific games. As millions tune in to popular sports competitions, a large majority are watching the game to determine the outcome of a wager.
Nearly 50 percent of Americans are interested in sports betting. From football to auto racing, these contests attract global sports enthusiasts. As the market continues to grow, institutional investors, state governments, and other players are researching how to receive a piece of the economic pie.