Online sports betting: The new frontier of legal gambling

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  Quantumrun Foresight
• November 1, 2021

Insight summary

The US is witnessing a significant expansion in legal gambling, particularly in online sports betting. This growth, fueled by the closure of physical casinos during the COVID-19 pandemic, has seen platforms like FanDuel and DraftKings rise in popularity, while also prompting the implementation of measures to combat gambling addiction. The industry, heavily regulated to ensure fairness and transparency, has potential implications ranging from increased tax revenues and technological advancements to shifts in entertainment preferences and a reduced environmental footprint.

Online sports betting context

The US is in the midst of the largest expansion of legal gambling in the nation's history. This surge in sports betting was triggered by a pivotal 2018 Supreme Court decision that allowed its legalization in states beyond the borders of Nevada. By the end of 2020, legal sports betting had become accessible in an additional five states and Washington, D.C., bringing the total tally of states where sports betting is legal to 21. Interestingly, this growth occurred in tandem with the COVID-19 pandemic, which led to the closure of casinos across the country while simultaneously prompting those confined to their homes to explore online gambling.

In the midst of this shift, sports betting platforms like FanDuel and DraftKings have seen a significant increase in popularity. These platforms have made their presence felt by sponsoring major cultural events and launching extensive advertising campaigns on social media platforms and television. To address the issue of gambling addiction, these businesses have implemented measures that allow players to set limits on their investments and expenditures, as well as enabling them to self-impose restrictions on betting for specific periods of time. 

However, it's important to note that the sector operates under stringent regulations. Companies in this space are subject to penalties and fines imposed by state regulators for any violations, which can range from running unlicensed games to registering profiles for individuals who have opted for self-exclusion. This regulatory framework is designed to ensure that the industry operates in a manner that is both fair and transparent, protecting the interests of the players while also maintaining the integrity of the games.

Disruptive impact

Since the US Supreme Court's 2018 judgment, $57 billion in legal sports wagering have been placed, generating over four billion in revenue and $571 million in tax or jurisdiction income (figures as of November 2021). Should sports betting be permitted in all 50 states, annual payouts are expected to surpass $19 billion. 

These early figures show just how valuable online betting can be for any country, especially as governments search for new tax revenues. This industry’s rapid and profitable success could likely influence other countries to expand their regulations to allow these betting platforms within their domestic markets; this scenario would further fuel the growth prospects of the sports betting industry during the 2020s. 

The growth of sports betting will also drive renewed interest and engagement in sports viewership for a manner of competitive sports worldwide, fueling increased sports advertising budgets from consumer brands of all kinds. Likewise, this new medium of consumer attention also represents a growing multibillion-dollar marketing niche that brands and governments can profit from.

Implications of online sports betting 

Wider implications of a growing online sports betting industry may include:

• Governments collecting large amounts of previously untapped gambling revenues (in the form of online gambling taxes) that they can spend on social programs.


• The improved regulation and safety of sports gambling and reducing its exposure or control from criminal organizations. 


• The integration of online sports gambling within the growing competitive Esports niche.


• An increase in the number of people seeking help for gambling addiction, potentially straining social services and healthcare systems.


• New revenue streams for states through taxation and licensing fees.


• A shift in entertainment preferences influencing the types of media and entertainment products that are developed and marketed.


• Advancements in data analytics, artificial intelligence, and cybersecurity, leading to broader applications of these technologies in other sectors.


• A decrease in the environmental footprint of the gambling industry, as less physical infrastructure is required.

Questions to consider

• Do you believe these betting platforms will be able to accurately screen and prevent gambling addicts from using online sports betting forums?


• How might online gambling evolve over the coming decades? What cultural trends might it integrate with?