How Sports Betting Could Impact Online Poker In The US

Steve Ruddock December 4, 2017 1065 Reads
Sports Betting in US

With oral arguments in the case of Christie vs. NCAA slated to begin on Monday, sports betting is going to be front and center this week, and a hot topic of conversation until the decision is announced some months later.

Part of that conversation will include how sports betting fits into the current efforts to legalize online poker, and how the two products might coexist.

In this column, US Poker will examine the current relationship between sports betting and online poker around the globe and what that relationship might look like if sports betting is legalized in the United States.

Springtime decision could stall online poker efforts

Monday will be the culmination of what has been a long and frustrating process for New Jersey. After several years of court battles, New Jersey will have the opportunity to make its case for the repeal of PASPA to the highest court in the land: the Supreme Court of the United States.

Oral arguments might be occurring this week, but the SCOTUS decision isn’t expected until Spring, leaving the future of legal sports betting in the US in limbo.

This uncertainty could delay online gaming legislative efforts in states across the country during the first half of the year, but once the decision is rendered, and assuming it’s a positive one for New Jersey, the proverbial floodgates might open.

What happens if NJ wins?

According to the experts, New Jersey is a small favorite to prevail, and if it does, legal sports betting is expected to sweep across the country in short order.

In addition to New Jersey, four other states have already preemptively legalized sports betting:

If New Jersey wins, the second half of 2018, and 2019 could be a very interesting period in statehouses across the nation on the sports betting front.

What, if any, impact the repeal of PASPA would have on efforts to legalize online poker and online gaming is less clear.

One camp believes sports betting will push online gaming legislative efforts to the side. The other camp believes the online gaming will piggyback on the momentum created by sports betting.

Regardless of how it shakes, it’s a pretty safe bet that wherever sports betting and online poker are legal they’ll not only coexist, they’ll thrive together.

Looking to Europe for answers

Sports betting is big business in Europe.

In a May 2016 report, industry analysts Eilers and Krejcik Gaming estimated the European online gaming market at €14.3 billion. E&K has sports betting making up 40 percent of the market.

  • Casino €6.5 billion
  • Sports betting €5.8 billion
  • Bingo/Other €1.1 billion
  • Poker €900 million

H2 Gambling Capital paints an even rosier picture for sports betting. In 2016, H2 estimated the total European online gaming market at €14.2 billion. H2 has Sports betting accounting for 41.5 percent of the market.

  • Sports betting €5.9 billion
  • Casino €3.9 billion
  • Bingo/Other €2.3 billion
  • Poker €2 billion

The connection between sports betting and poker

To say poker players dabble in sports betting is putting it mildly.

Poker rooms have always been filled with would-be sports betting “sharps,” and sports bettors often believe the skills they use to pick winners (research, knowledge, and finding edges) will translate well in the poker world.

Not surprisingly, over the years, poker, casino, and sports betting have joined under a single umbrella.

Companies that began as one or the other have either developed these verticals in-house or consolidated through mergers and acquisitions in order to capture more of their customer’s gambling dollars.

Targeting poker players

The Stars Group, PokerStars parent company, is the latest company to branch out into sports betting.

Tired of seeing its online poker players bet sports and play casino games at competitors’ sites, the company launched an online casino in early 2015 and started offering sports betting in June 2015.

In order to get its poker customers to switch to its casino and sports betting products, the bulk of PokerStars’ early casino and sports advertising was spent on cross-promotion targeting existing poker customers.

Even though it is targeting its poker customers, what PokerStars has discovered (and what other companies like GVC and 888 already know) is most people don’t have all-encompassing gambling bankrolls. Rather, most people set aside a certain amount for poker and a separate amount for sports betting.

Therefore, rather than shifting revenue from poker to sports, Stars is seeing incremental revenue gains since launching casino and sports betting.

This same strategy will likely be used in US markets. Existing US online poker operators will market extensively to their existing player databases and likely find success.

Right now, there are more questions than answers.  but with a SCOTUS decision coming in the coming months, we’re betting we’ll get answers sooner rather than later.