As the U.S. approaches the four-year anniversary of the U.S. Supreme Court overturning a ruling that had limited legalized sports betting, some 30 states are offering the practice in various forms, while others have enacted legislation that will allow it.
In that time, sports betting has gone from being a somewhat taboo, offshore business to now becoming "a mainstream entertainment platform," PointsBet USA CEO Johnny Aitken said on the latest episode of "MediaTalk," a podcast by S&P Global Market Intelligence. The nascent industry's rise and the host of sportsbook operators chasing the action are leading to increased levels of engagement and viewing with sports telecasts.
Aitken's company offers mobile betting in Colorado, Illinois, Indiana, Iowa, Michigan, New Jersey, New York, Pennsylvania, West Virginia and Virginia. He said that in 2021, legalized sports betting generated some $58 billion in wagers. That translated into some $4.3 billion in revenue for the sports betting operators.
By 2025, the revenue opportunity could reach as high as $37 billion, with Aitken pointing to myriad marketplace dynamics as reasons for industry optimism.
These include maturation in states that have already enacted sports betting; more states entering the arena, including potentially California and Texas; continued marketing spending by PointsBet USA, DraftKings Inc., FanDuel Inc. and other operators; and the further unlocking of data and its integration into sports telecasts.
"There is extreme growth ahead for this category," said Aitken.
PointsBet is looking to participate in that market expansion as the official sports betting partner of NBCUniversal Media LLC's NBC Sports, and via what Aitken said is technology "developed by sports bettors for sports bettors."
While competitors lease their tech stacks, parent PointsBet Holdings Ltd.'s ownership of proprietary tech affords a first-mover advantage, relative to the implementation of rewards programs, market pricing and distinct features, Aitken said.
That includes the company's "Points Betting" offering that enables players to maximize their winnings or minimize their losses, depending on the final score line measured against the point spread. In this highly "leveraged way" to bet against fixed odds, "every point, every moment matters, even if the game is a blowout."
This unique feature has been particularly embraced in New York, where PointsBet USA launched in January Its usage has been 5 times higher than in other states. Aitken's inference: New York is home to a lot of financial traders, and that group is interested in not only "being right, but being really right."
Aitken said some operators have been "suffocating" the airwaves with commercials as they look to build brand awareness and market share. He noted that it will be challenging for industry players to make a profit if they maintain these levels of ad spending, with messaging often touting "generous" introductory offers.
PointsBet USA's own marketing and advertising efforts aside, Aitken said the company prefers to integrate its data and odds with leagues and broadcasts to provide enhanced contextualization.
Those initiatives are paying dividends. Aitken said such exposure has increased sign-ups for the company's mobile betting app and prompted more pregame and in-game bets and higher handles.
Much of sports betting today remains tied to clubs giving or getting points or wagers against the over/under of teams' combined scoring. But Aitken said there is already movement toward more in-game scenarios or what the company calls "lightning bets," the results of which occur within minutes.
He said baseball and golf are two sports that could benefit the most from such activities. With baseball, lightning bets can apply to the results of a particular at-bat: hits of various kinds or different kinds of outs. On the links, markets can be created against the longest drives, iron shots winding up closest to the pin, and putting hits or misses.
Building on the company's presence in 10 states, PointsBet crossed north of the border into Ontario in April.
While Aitken is hopeful that launches in California and Texas will happen within the next few years, he said, "It's not a matter of if, but when" in Ohio. There, he believes the first legal sports betting wagers could be placed in December this year or January 2023. The company also is eyeing upcoming launches in Louisiana, Arizona, Maryland, Kansas and Massachusetts.
All told, Aitken envisions PointsBet USA doubling its state betting roster over the next couple of years.
