With Sports Bettors Stuck At Home During Pandemic, Online Gambling Provides Jackpot

Gamblers have turned to online betting during the coronavirus pandemic, and there is a belief that Americans will continue to wager from the comfort of their own homes at a high rate in the future.

With so many casinos across the country closed for weeks or even months at a time, U.S. commercial casino gross gaming revenue was down 78.8% in the second quarter of 2020 compared to Q2 in 2019, the American Gaming Association reported. Revenues from online gaming rose by 253.8% compared to the same three-month period last year with casinos making $402.7 million.

Almost all U.S. casinos were forced to temporarily shut down in March. New Jersey, Delaware, Nevada, and Pennsylvania, where online poker is legal, all set records for online game revenues that month.

Sports betting is legal in 22 states and Washington, D.C., though only seven states currently offer the ability to wager on sports with online and mobile options. That could change in the near future, especially with state governments seeking financial assistance during the pandemic.

“I absolutely believe that, in addition to sort of the cross-border competition issues that would be addressed by doing something here in Massachusetts, it would certainly generate revenue and it would be something that a lot of people would be interested in here at home as opposed to doing across the border,” Massachusetts Gov. Charlie Baker, who has been pushing for the state to legalize sports betting, said in July.

New Jersey generated $299 million in gross revenue and $36.7 million in tax revenue on sports betting in 2019, the first full year in which the state offered legal sports wagering, according to the New Jersey Division of Gaming Enforcement. Nearly $4 billion was wagered online in New Jersey.

Penn National Gaming Inc. has seen its company’s stock price soar over the last few months. Down to a low of $4.52 a share on March 18, a week after NBA star Rudy Gobert tested positive for COVID-19 and all sports were effectively suspended, Penn National was north of $53 a share Tuesday morning.

Nearly all 41 of Penn National’s gaming properties are back open, and the company plans to launch the Barstool Sports betting app in Pennsylvania in September.

DraftKings debuted on the stock market in April and was priced at north of $35 a share Tuesday morning. The company now has a market capitalization of $12 billion, according to The Wall Street Journal, after being valued at $3.3 billion four months ago.

DraftKings announced a $161 million loss in the second quarter, though the sports betting platform expects to thrive in the future with sports returning.

“As sporting events began to resume, the Company saw increased engagement with its sports-based product offerings, which contributed to sequential monthly revenue improvement during the second quarter,” DraftKings said in a release Friday. “This positive momentum has accelerated with the return of MLB, the NBA, WNBA, the NHL, and MLS.”

Sports betting revenue for the first half of this year is up 10.4% from the same period in 2019.