By E.B. Tucker, editor, Strategic Investor
It’s no surprise that NFL game attendance is in decline.
It’s expensive to go to an NFL game. After you factor in concessions, it could cost a family of four close to $500 at minimum. At that price, it’s upper deck, top row, pack your own lunch in a brown bag. That’s a big expense for most families today.
I recently went to the New York Giants game at MetLife Stadium to watch them play the Minnesota Vikings. John Pangere, my analyst, and I bought the worst possible seats. Each ticket still cost $100 each.
E.B. waving from the worst seat in the house
But what you might find surprising is that even as the NFL’s attendance has gone down, viewership is on the rise. After two years of declines, viewership rebounded last year and is continuing to climb.
This is no coincidence. It lines up with a megatrend that I’ve been following since its beginning: legalized sports betting. It’s one of the best money-making opportunities today.
It’s been picking up steam since May of last year, when the Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA).
Enacted in 1992, PASPA effectively banned sports betting outside Nevada. The state of New Jersey filed a lawsuit saying the law was unconstitutional, and the Supreme Court agreed, handing the power to legalize sports betting back to the states. New Jersey became one of the first states to pass sports betting legislation.
Below, I’ll tell you why my visit to New Jersey illustrates why legal sports betting is here to stay… and how its explosive growth so far is just the beginning…
Boots on the Ground
The Giants game wasn’t my first time in New Jersey. In September 2018, I flew there to see the brand-new FanDuel Sportsbook in the Meadowlands Sports Complex. (A sportsbook is a place where individual bettors can wager on numerous sports.)
With the paint barely dry, we wanted to see how many people lined up to bet on sports.
We asked people in our travels and around the area what they thought about legal sports betting. Most still didn’t know it was legal. Many were still using their illegal bookies to place their bets. (Research from the University of Nevada, Las Vegas, suggests that the illegal sports betting industry is turning over $150 billion a year.)
Legalized sports betting helps do away with the shady characters of illegal betting. No more random visits with a lead pipe if you don’t pay up. No more waiting to cash out if you happen to win.
Last year showed us the potential for sports betting. Even though the FanDuel Sportsbook opened just before our September 2018 visit, it hosted a decent crowd. Coach buses would shuttle bettors to and from MetLife Stadium (which is in the same complex) on gameday to place bets. The space itself measured around 5,000 square feet, with wall-to-wall TVs, a bar, and food service.
We went back last month to see what changed one year after our first visit.
Here’s what we found…
Placing Our Bets
Before heading into the stadium to watch the game, we went back to the FanDuel Sportsbook to place bets.
Betting on the underdogs
After placing bets on all the day’s early games, we noticed some new features and a more diverse crowd this year. When the book first opened, the crowd was basically all male.
That’s not the case today. On the shuttle ride over, there were two women and two men talking about their weekly bets. Even in the sportsbook, we noticed significantly more women than before.
Men still dominate sports betting. But more women bettors shows us that it’s not just a man’s game. Several of the women we observed were very serious about their bets. From our view, we think they might be better gamblers than men.
Even more shocking was the amount of people making bets of $2,000 or more. The sportsbook has a separate window for bettors making bets that large. At the time of our visit, we counted no fewer than a dozen people in line.
We noticed some other features, too. Live broadcasts of experts giving betting advice ran throughout the day.
Professional betting advice broadcast at the FanDuel Sportsbook
You don’t have to visit the physical sportsbook to place a legal bet in New Jersey. Anyone physically in the state can bet using the FanDuel Sportsbook mobile app. The app uses your phone’s location data to allow or block its use.
We used the betting app to place bets on the day’s late games.
We also noticed that at every point in a game, there’s a cash-out option through the app. Think of it as a trailing stop loss. That’s not something you can get with a corner bookie.
The cash-out option is a bettor’s stop loss
After attending the game and hanging out at the sportsbook, we realized why sports betting may just save professional sports.
It’s also why we think we’ll start seeing sportsbooks inside professional sports stadiums before too long. Similar sanctioned in-stadium betting arrangements are in the works.
Ted Leonsis, owner of the NHL’s Washington Capitals and the NBA’s Washington Wizards, recently announced a partnership with William Hill to operate a sportsbook inside the Capital One Arena. Right now, they’re awaiting regulatory approval before getting up and running.
Add in 5G capability inside the stadium, and the gameday experience could vastly improve. This is just the beginning.
Even with so much traction, the U.S. sports betting market is still ramping up. It’s also evolving fast. It’s only a matter of time before this once shadow industry comes fully into the light. That means hundreds of billions of dollars flowing legally through sportsbooks.
Today, state lawmakers are starting to see the potential tax revenue from legalized sports betting. Just take a look at the map below. The states in dark green have sports betting today. The states in light green have laws on the books but are working on how to implement the new laws before going live.
Remember, last year, only a handful of states moved quickly enough to capitalize on sports betting.
But it’s not just these 18 states that see the opportunity to cash in. Nearly every other state has legislation in the works to legalize sports betting.
We can see why with the numbers coming out of New Jersey.
Since June 2018, when the first legal sports bets landed in the state, bettors have ponied up more than $4.2 billion to win big. That means sportsbooks across the state collected over $280 million in revenue, with the state raking in more than $37 million in taxes.
What those numbers don’t show are the number of jobs created and added economic activity because of sports betting.
Again, we think this is just the beginning. We expect those numbers to increase over time. Just think, for decades, Nevada casinos had a hold on sports betting. However, we’re seeing a shift in dollars bet to New Jersey and other states today.
So far this year, New Jersey surpassed Nevada as the king of monthly sports betting three times. The first time was in May, the second in July, and the third in August.
That doesn’t mean Nevada sportsbooks are suffering. Quite the opposite. In fact, through September, sports betting in Nevada is up 8% over the same timeframe last year.
It goes to show what happens when $150 billion or more of illegal bets starts flowing into legal businesses.
What’s interesting about the New Jersey betting trends is the amount that’s bet online through apps like the FanDuel Sportsbook. According to the state, there were almost $375 million in bets made online in September. Meanwhile, in-person betting came in at just over $71 million for the month.
Online and app-based betting accounts for nearly 85% of all wagers in the state. No more driving to the casino to place bets. You can do it all from your couch while watching that day’s action.
That doesn’t mean casinos are suffering. Despite betting through the app, many people still like the social aspect of watching games with friends. We witnessed this at the FanDuel Sportsbook. We noticed a number of groups betting on the app while still watching games at the Sportsbook. Either way, the sportsbooks win.
Owning a sportsbook is like having a license to print money. And that’s why legal sports betting will deliver huge profits to investors who lock into this trend early.
Editor, Strategic Investor
P.S. Legal sports betting is just one of the long-term trends that I’ve zeroed in on. But there’s an opportunity in the gold sector I want to tell you about that’s more urgent.
I just discovered a little-known anomaly that has the potential to rack up gains as high as 52,900%… starting in December. It’s even more explosive than gold miners or royalty companies.
It’s not a stock, bond, or ETF. And it has nothing to do with options, futures, or cryptos… but it can be easily bought through any broker.