This year, for the first time, Nevada Sports Books accepted bets on the Olympic games. It is estimated that more $1 billion was wagered during the Rio 2016 Olympics – highlighting how sports betting has become “all the rage.” An integral part of the gambling market, sports betting has gained a great deal of popularity in recent years – all thanks to the easing of gambling regulations by governments in many parts of the world. Occupying the largest share of the gambling market, the global sports betting market was valued at $205.6 billion in 2015 and, according to analysts at Technavio, is likely to grow at a CAGR of 4% by 2020.
Factors behind the popularity of sports betting
To begin with, the reach of online gaming has increased immensely as a result of internet penetration. This has, in turn, led to the heavy promotion of e-sports. As sports betting does not require travel to a venue and offers convenience in terms of allowing players to bet when and how they want, it is becoming more and more prevalent in the young population. Additionally, high adoption of smart devices and higher volume of mobile ads has further boosted the popularity of sports betting among gamblers.
Another driving force behind the sports betting market is increased access to international credit and debit cards. International cards are no longer limited to a select few; instead, banks are now reaching out to customers across various socio-economic levels, making it easier for them to obtain an international banking card. As a result, it has become easier to engage in e-sports betting on a foreign website. Thus, even in countries that have stringent laws for online sports betting, the market is growing at a steady pace.
Also, when compared with other verticals of the gambling market, sports betting provides ‘painless revenue’ for governments. The UK and China are the best examples of this scenario. These countries encourage gambling, as it brings them premium tax amounts from the gambler’s ‘painless revenue’. It is usually the disposable income after taxes that players invest in sports betting, which in turn is converted into taxable income as vendors collect this money to pay the winner the prize amount. This way, governments generate revenue that can later be used for important nation-building programs.
Finally, as many families today are double-income households, the amount of disposable income they have is relatively high. And with the easing of government regulations, exposure and access to gambling platforms across the world, and popularity of sports like football, baseball and cricket, it is clear why the sports betting segment holds the largest share of the global gambling market.
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