Sports Betting Surges as States Legalize the Billion Dollar Market

May 22, 2019

By Spencer Feingold

Sports betting continues to grow significantly in the United States following the landmark Supreme Court ruling last year that paved the way for legalizing the billion dollar industry.

The case, Murphy v. National Collegiate Athletic Association, was spearheaded by New Jersey, which argued that the federal government ban on sports betting imposed on state’s lawmaking rights.

“New Jersey was the biggest state [for betting]. We were talking $300 million a month,” Darren Rovell, the senior executive producer for The Action Network, told Cheddar in an interview Wednesday. “It was becoming the second Vegas.”

The court ruled in favor of state’s rights and overturned the Professional and Amateur Sports Protection Act of 1992, opening the door for state-sanctioned betting. ”A more direct affront to state sovereignty is not easy to imagine,” Justice Samuel Alito Jr. wrote in the court’s decision.

In the last year, several states have legalized sports betting — which is estimated to become a $155 billion market by 2024 — and betting platforms, like The Action Network, have grown exponentially.

Over that period, The Action Network reported both its number of unique users and app downloads have increased over 700 percent as well as an increase of 500 percent for registered users. The company also said that fans on Super Bowl Sunday in February spent the equivalent of 2.4 years on the app.

“Gamblers don't want to just go with their gut … They want information. It is just like the stock market,” Rovell said, adding that bettors “know a hell of a lot more about sports” than people know about the companies they invest in.

“Information protects you against the luck of it,” added Rovell, who previously worked as a sports business writer at ESPN.

The Action Network — which was founded in 2018 and provides sports news, betting tools, and analytics for fans — raised $17.5 million in a Series B funding round in February.

Several states, including New Jersey, Nevada, Pennsylvania, Rhode Island, and Delaware, already have legal, state-sponsored sports betting markets. Dozens more have legislation pending.

“There is a want for it, and there is a need for it,” Rovell said. “How fast it spreads will depend on what the states individual deals with operators are.”