Football Season and Election Season Loom Large for Online Sportsbook Operators

US sportsbooks are right on the cusp of football season, the most lucrative time of the year for wagering. The first half of 2022 saw sports betting revenue jump by more than two thirds versus H1 of the prior year and expectations are high for the second half. $1.8 billion is expected to be spent on advertising across the nation this year by sportsbook operators.

Coinciding with football season is election season and sports betting will be on the ballot in California come November. However, it’s not as simple as “yes” or “no” in the Golden State, as two competing ballot measures, Proposition 26 and Proposition 27, will be voted on. The passage of either would signal the support of voters for legal sports gambling in California, but the former would allow the state’s Native American tribes to maintain total control of the industry while the latter would open up the state’s betting markets to outside corporations like DraftKings and FanDuel who have backed the bill with hundreds of millions of dollars.

Related ETF: Roundhill Sports Betting & iGaming ETF (BETZ)

The online sports betting business has grown rapidly throughout the past four years, following the US Supreme Court’s 2018 decision to rescind a prohibition on the practice in most places across the nation.

In 2021, Americans wagered nearly $57 billion on sporting events, according to the American Gaming Association (AGA). Sports betting has now been legalized to some degree in 36 states (plus the District of Columbia). Six of those states have passed laws to deregulate wagering but have not officially launched sportsbook services yet. Ohio, the state with the largest expected market among those who have legalized sports betting but are yet to green-light operations, will allow sportsbooks to begin taking bets on January 1, 2023. The state’s Legislative Budget Office has projected a $1.1 billion handle for fiscal year 2023 and $3.1 billion for fiscal year 2024.

In the first half of 2022, the AGA pegged overall US gaming revenue at $29.16 billion, representing an 18% YoY gain versus the same period last year. Commercial sports betting revenues totaled $3.04 billion, representing a much faster growth rate than gambling as a whole, surging 63.9% YoY.

January 2022 saw more money wagered on sports than any single month in the past at $4.36 billion, but handles in most markets have been falling since then. That’s largely due to the fact that the largest share of the US’s betting handle typically comes in during the National Football League’s (NFL) regular season and playoff schedule – the period between September and February – so the bulk of 2022’s handle is still in the pipeline.

Sportsbook operators are expected to spend $1.8 billion on online gambling advertising this year, up from $1.0 billion last year, according to media consulting firm BIA Advisory Services. In the same way gambling firms are willing to pay up for advertising, they’re also dumping heaps of cash into political interests ahead of a key ballot initiative this election season.

Major industry players see so much potential still left to be tapped in sports betting that committees supporting and opposing two proposals for gambling legislation in California, Propositions 26 and 27, have made sports betting the most expensive ballot measure in state history. Per Ballotpedia, several parties in each camp have spent more than $250 million collectively to decide who will ultimately reap the profits if and when California does legalize mobile sports betting within the state. The Los Angeles Times puts the figure much higher, claiming $350 million has been anted up, a sum that could grow to half a billion dollars by the time all is said and done in November.

Sports betting is likely to be approved in some capacity California, as a February 2022 survey by UC Berkeley and the Los Angeles Times found that a…