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After a strong 2021 that saw almost a dozen states either legalize sports wagering or add mobile betting, the focus in 2022 shifts to the future of sports betting in the United States’ most coveted and largest markets.
Last year, mobile betting launched in Virginia, Michigan and Arizona, which quickly became among the most keenly contested battlegrounds for new customers among sportsbook operators in 2021 due to their unique combination of market size, market-access availability and operator-friendly tax rates.
In the case of Arizona, a shotgun start launch on the opening day of the National Football League (NFL) season, traditionally the hottest time for customer acquisition, also helped spur the market to become a hotbed and a top five market by online sports-betting revenue in its first full month of operation in October.
2022 will provide little rest for the weary, with VIXIO GamblingCompliance forecasting for four to 11 states to legalize sports betting or expand to mobile during the course of year. Below are a few of the key trends to follow throughout the year.
November Madness
Perhaps the most impactful situation on the horizon for sports betting in 2022 is the potential for voter referendums in California and Florida, together home to more than 60m residents, as well as being two of the most popular states for travel in the U.S.
A referendum that would allow land-based sports betting at California's tribal casinos and racetracks is already on the November ballot, with three other initiatives being proposed, one that would allow land-based betting at state cardrooms, and two others that would allow state-wide mobile betting through tribal partnerships.
DraftKings, FanDuel and other sportsbook operators have backed one of the proposals, committing to $100m in spending in an effort to get the initiative on the ballot and set up the most consequential sports-betting referendum to date in the U.S.
DraftKings and FanDuel have also backed a voter referendum in Florida, and although signature gathering and verification efforts will continue in California through June, the companies have only until February 1 to hit their target of almost 892,000 valid signatures in Florida to reach the November ballot.
Voters in Georgia could also have an opportunity to weigh in on sports betting on November 8 if state legislators follow through on progress made in 2021, where a bill passed in the Senate that would have put a question on the 2022 ballot but stalled in the House.
Beyond the ballot, Massachusetts and North Carolina are among the most significant states to watch in terms of traditional legislation to approve sports betting. Both states saw progress in 2021 toward mobile sports-betting legislation, with bills passing out of one house of the state legislature carrying over to this year’s legislative session.
Major Market Launches
The biggest state launch in the U.S. in 2022 could very well be the very first one out of the gate, as New York’s nine selected mobile betting operators are hoping to launch this month in time to capitalize on the NFL playoffs and in advance of the Super Bowl.
Many of the questions surrounding New York’s high cost of admission, including a 51 percent revenue share for the state and a $25m upfront license fee, could reveal themselves at the early stages. In particular, there are question marks over how the high tax will affect marketing plans of operators compared with other major launches and whether pricing is comparable to offerings from offshore sportsbooks or providers from neighboring states like New Jersey and Connecticut, which remain in close proximity for much of the Empire State’s population.
Beyond New York, March will see something of a relaunch in Illinois with the permanent lifting of the state’s on-again, off-again requirement that players register in-person at retail sportsbook locations for mobile wagering accounts.
Although some companies such as FanDuel, DraftKings, and Rush Street Interactive were able to register players remotely during the heights of the pandemic while the restriction was temporarily suspended, other major players such as BetMGM, Caesars and Barstool were unable to fully capitalize and have to make their mark on an Illinois online sports-betting market that has nevertheless become the second largest in the U.S., behind only New Jersey.
In other closely watched moves, regulators in Ohio will spend much of the year crafting regulations and sorting through licensing in advance of a market launch that is required to take place by January 1, 2023, while Maryland officials should begin to approve at least some of the up to 60 mobile licenses permitted under the convoluted regulatory structure put in place through legislation last year.
Marketing Wars
Meanwhile, the impact of advertising will continue to be a conversation that gets louder as the year goes on before hitting fever pitch as a new NFL season starts in September. As the year drew to a close, legislators and regulators in states with highly competitive markets such as Colorado and New Jersey began to grumble about the steady stream of ads that continued to permeate state channels.
The NFL permitting national advertisements to run during games for the first time in its history also surely had an effect, as domestic leagues and teams continue to embrace sports-betting advertising as a new source of revenue in the United States even as international leagues are seeing the pushback against in-game television advertisements and jersey sponsorships.
With the nation’s biggest media market, New York City, set to come online in the coming weeks, mainstream media is likely to take new notice of the increased advertisements, which could ultimately spur more discussions and potentially action from state or even federal regulators.
