Article By: Hunter Rizzuto

While the United States presidential election was underway, not many individuals had anything other than two particular candidates’ names on their minds. Through the thick of the election, three more states have joined the growing trend and legalized sports betting. Namely, Louisiana, Maryland, and South Dakota were the only three states with sports betting on their ballots during this election season, all of which were approved by state legislation.1 It has been over a year-and-a-half since the United States Supreme Court delivered a landmark decision in Murphy v. NCAA to eliminate the federal ban on sports betting and give state legislators the power to legalize.2 Although sports betting is not a new phenomenon, the way these new-aged sports bettors are betting is entirely different now than from when it initially became legalized. Throughout the discussion below, we will touch on what is to come in the new world of sports during the pandemic; the recent boom in online sports-wagering; lower viewership numbers amid more watchers at home during the pandemic; and, how increased state revenue will convince other states to legalize sports betting. As you will see, this paradigm shift in sport betting is ostensibly due to the coronavirus’ impact on sports.

The spread of the coronavirus has severely hurt thousands of businesses and industries across the country; however, the sports-betting industry had the potential to take the biggest hit. Over the last few months, we have witnessed many major sport leagues take essential steps towards curbing the spread of the coronavirus to conclude their seasons. First, The MLB and MLS had begun to test all of their players for the coronavirus multiple times per week, while the NBA took more of an aggressive approach and featured daily testing.3 Next, when the NHL and NBA returned to play, they immediately installed a ‘bubble’ where players moved to a designated location. The NBA designed a singular bubble where all players came to quarantine and play, while the NHL implemented multiple bubbles in select areas. On the other hand, the MLB decided to allow teams to play in their home stadiums and left it up to state law to determine if fans were allowed during the regular season. Once the season concluded, the MLB implemented a bubble that was just as successful as its peers. The outlier thus far during the pandemic has been the NFL – they have yet to implement a bubble amid ongoing positive COVID-19 results among its players and multiple postponements of games due to positive cases. Regardless, the pandemic has not prevented bettors from wagering on sports and has taken the trend to record highs after all.

Although no fans are in the stands, they are still watching at home and taking advantage of new state legislation. After the conclusion of the presidential election, twenty-one states will now offer legal sports betting in 2021. For the third month in a row, New Jersey bettors have set the national record for the highest wagered amount on sports with over $803 million in October 4. With a potential second wave of the pandemic on the horizon, state regulations have forced many in-person sportsbooks to set capacities to limit the spread of the coronavirus. Nonetheless, bettors are seemingly becoming more comfortable using various online sportsbooks available in their states, such as DraftKings5 or FanDuel. According to the American Gaming Association, there has been a 12% increase in online betting over the past year.6 As bettors try to determine whether they will wager online or at in-person casinos, the pandemic has shown state legislatures that, either way, the industry will not stop growing.

With New Jersey breaking records for the highest amount wagered on sports on a somewhat monthly basis, and many states eager to get their foot in the door, some states have yet to see the benefit of legalizing sports betting. Waning viewership and consumer interest may have discouraged many of these states from making the jump during the election. Specifically, per Nielsen ratings, the 2020 MLB World Series viewership was down by more than 30%, with an average of fewer than 10 million viewers per game. This decrease has become a trend across major sport leagues, even with more fans at home due to the pandemic. Further data shows viewership is down for not just the MLB but nearly every other major sport as well – the Stanley Cup Final was down 61%; the final round of the PGA Tour’s U.S. Open was down 56%; the NBA finals were down nearly 50%; and the first quarter of the NFL season was down 10%.7 To many, this has not come as a surprise since 2020 has been filled with many surprises. Without the human aspect of a sporting event involved (i.e. fans in the stands or emotional responses to a bad call), the average viewer may feel disconnected to the sport, just as if they were watching a cliche TV show that they do not connect with. The return to action for sports seemed like it was what every American needed in their lives; however, as the pandemic progresses, the urge to engage in other activities (e.g., enjoying time in the great outdoors) may be one of the main contributing factors to these low viewership numbers. Hopefully with the announcement of a coronavirus vaccine coming to the United States8, fans will slowly be allowed back into stadiums and every sports viewer will find the connection that was lost due to the pandemic.

Regardless of low viewership numbers, legislators may soon need to fast track sports-betting operations. The coronavirus has contributed (and will undoubtedly continue to contribute) to the financial deficit many states may find themselves in as many tax paying businesses are going out of business and many Americans going on unemployment. For this reason, state legislators need to find new ways of raising revenue to cover the increasing costs of the pandemic. Launching into the sports-betting industry can create a stable source of state revenue. Tax rates between 10% and 20% of revenue for states have proved this trend, but also, the industry can create employment opportunities within companies whose states legalize the trend.9 According to Forbes, the United States sports betting market is expected to reach $8 billion in the coming years, with the possibility of getting to at least $10 billion by 2025.10 While it is true that sports viewership is down, it is impossible to deny the monetary benefit this growing industry could provide many states during the pandemic.

As post-game celebrations become a trend of the past due to social distancing regulations, the legalization of sports betting will allow legislators and bettors alike to celebrate one small victory during the coronavirus pandemic.

1 Larking, Roy. “Maryland, Louisiana and South Dakota Vote Yes to Legal Sports Betting.” November 4, 2020 (available at: www.si.com/gambling/2020/11/04/election-2020-new-legal-sports-betting-states)

2 Murphy v. NCAA, 138 S. Ct. 1461 (2018)

3 Lacques, Gabe, et al. “As Sports Return, Experts Fear Leagues Will Use up Scarce COVID-19 Testing Resources.” July 12, 2020 (available at: www.usatoday.com/story/sports/2020/07/12/coronavirus-sports-leagues-burdening-covid-19-testing-resources/5404426002/)

4 Parry, Wayne. “New Jerseyans Bet $803M on Sports in October, More Than Any Other State.” November 14, 2020 (available at: www.nbcphiladelphia.com/news/local/new-jerseyans-bet-803m-on-sports-in-october-more-than-any-other-state/2597113/).

5 Since Draftkings went public in April, the company’s revenue rose to $70.9 million, compared to $57.4 million the prior year. Meanwhile, the stock price has risen more than 80% – the answer has to do with gambling laws, day traders, and a bit of ingenuity. See article for further reference on the matter. Hobart, Byrne. “How DraftKings Stayed Competitive in a World Without Sports.” Medium, Marker, 24 Aug. 2020 (available at: www.marker.medium.com/how-draftkings-stayed-competitive-in-a-world-without-sports-2d2471c23636 )

6 “2020 Survey of American Sports Bettors.” American Gaming Association. July 21, 2020 (available at: www.americangaming.org/resources/2020-survey-of-american-sports-bettors/)

7 Brown, Maury. “From The Pandemic To The Election: Why TV Viewership Is Largely Down For Sports In 2020.” November 2, 2020 (available at: www.forbes.com/sites/maurybrown/2020/11/02/from-the-pandemic-to-election-why-tv-viewership-is-largely-down-for-sports-in-2020/?sh=11ff3f30112f)

8 Pfizer. “Pfizer and BioNTech Achieve First Authorization in the World for a Vaccine to Combat COVID-19.” December 2, 2020 (available at: www.pfizer.com/news/press-release/press-release-detail/pfizer-and-biontech-achieve-first-authorization-world)

9 Norton, Charles. “Why States Are Betting On Sports Gambling To Cover Budget Deficits.” July 1, 2020 (available at: www.forbes.com/sites/charlesnorton/2020/07/01/why-states-are-betting-on-sports-gambling-to-cover-budget-deficits/?sh=6a422a952558)

10 Id.