This week is expected to bring relatively significant news on whether or not there’s progress on holding an MLB season in 2020. Fingers crossed.
The league and its players union are in negotiations about what to do with a roughly 80-game regular season (without fans) in terms of financial compensation. It’s a high-stakes situation for the baseball industry — but also for the nascent U.S. sports wagering industry.
The tentative plan is to have a season starting in early July, with the possibility of playing until November, should there be, let’s say, 100 games in the regular season. A lot is still up in the air.
Baseball’s popularity for bettors
Football and basketball, which have immensely popular professional and collegiate versions, are the kings of the sports betting world. Football is still No. 1, but the gap between it and basketball is closing. Baseball is a distant third, but still miles ahead of any other sport for wagering in America. The top sports betting states don’t even release handle figures on the National Hockey League and instead just include it in the “other” category, which also includes MMA, boxing, golf, and so on.
In New Jersey in 2019, the sportsbooks handled $698.4 million in baseball bets, winning $27.3 million off of bettors. The hold percentage of 3.9% was the lowest among the big three sports. Last year, the Nevada books handled $1.12 billion in baseball wagers, holding $57.2 million for a win percentage of 5.1%.
The 2019 Nevada baseball handle was the second-most in the state’s history.
The total sports betting handles for New Jersey and Nevada were $4.5 billion and $5.3 billion, respectively.
MLB in trouble without a season?
It appears that there’s an argument out there that baseball would suffer a huge setback if the owners and the players union can’t come to a business agreement for playing a season amid the COVID-19 pandemic. No one can argue against the idea that baseball is an American summer pastime.
But could it slide down the sports hierarchy if it doesn’t have a season and the NBA resumes and the NFL pulls one off? As an article from NBC Sports on Tuesday stated:
“If the sport were to disappear for a period of 18 months, it will fall off the radar for many casual fans. And a portion of die-hards will be so frustrated by the sides’ inability to come to a financial agreement at a time when so many are suffering physically, mentally and financially and craving the escape of sports that even their viewership habits could change … MLB cannot afford that. It is not at the height of its popularity like the NBA.”
The league would suffer a reputation blow, but would it be significant long term?
It’s hard to imagine, given how big sports betting in the U.S. is expected to become. Sports betting, in both retail and online/mobile settings, is expected to be considered even more seriously for regulation in a post-COVID-19 world where states are looking to capture untapped revenue streams.
Major League Baseball, like the other leagues, stands to benefit immensely. A Nielsen Sports study from 2018 estimated that MLB has the potential to see an annual revenue increase of $1.1 billion from legal sports wagering in the U.S., with more than $950 million of it coming “as a result of increased consumption and engagement with the league and its content/products.”
In addition, MLB has inked several business deals with sports betting firms looking for access to league data or marketing materials. Books are all in on baseball.
Arguably no other industry is rooting harder for a baseball season in 2020 than the regulated U.S. sportsbooks. Eighteen states and counting have them. Several others have legalized but haven’t launched yet. The state of Michigan barely crossed the finish line ahead of the pandemic, with retail sportsbooks opening just before March Madness only to close just days later. The Wolverine State could allow online/mobile books to launch later this year (but more than likely not in time for baseball).
Casinos nationwide are starting to reopen to gamblers, and some of them have sportsbooks. Online/mobile sportsbooks are regulated and live in 10 states, keeping the industry afloat over the past two months.
Summer is the slow season for the sports betting industry compared to the fall and winter. However, even the slow season is sorely missed right now. States have reported sports betting handle falling more than 80% between February and April. It’s slim pickings on the sports wagering menu, but mixed martial arts, auto racing, and golf resumed on U.S. soil in May, giving the books something.
The near total shutdown of the sports world isn’t expected to cause any long-term damage to the potential U.S. sports wagering market, which could eventually blow past $200 billion in annual wagers, according to a 2017 Oxford Economics study, commissioned by the American Gaming Association.
DraftKings, a sports betting giant, went public in April despite the sports world being on indefinite hiatus.
The AGA estimated that prior to the 2018 Supreme Court ruling that overturned the federal prohibition, about $145 billion was bet on sports each year illegally. The AGA last year found that only 41% of people know that a local bookie or offshore gambling website isn’t a legal method for wagering.
Whenever it returns, MLB will be a key piece of the equation and fans/bettors will return. It doesn’t have to worry about Korean professional baseball taking over, either.