States Weigh Bets on Mobile Sports Gambling

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As U.S. states move to legalize sports betting, the Journal takes a look at the world’s largest market for the industry—the U.K.—to see how real-time gambling works during a World Cup soccer match.

Now that states are free to craft laws legalizing sports gambling, the latest question is whether to enter the potential $9 billion mobile-betting market.

Americans legally gambling on this weekend’s World Cup final and other athletic competitions primarily are doing so in person at a limited number of casinos. Increasingly, though, gamblers in other countries are placing wagers from their smartphones.

In the U.K., the world’s largest legal sports-betting market, revenue from online wagers has more than doubled over the past five years and now represents 60% of the market, whereas revenue from in-person betting has fallen by about 12% over the same period, according to data from Gambling Compliance, an industry research firm.

“Where consumers are pulling this is in the direction of mobile,” said

Chris Grove,

managing director at research firm Eilers & Krejcik Gaming LLC. “It helps regulated sports betting appeal to the broadest possible audience.”

Mobile betting could increase total U.S. sports gambling revenue by $9 billion, to $16 billion, if all 50 states adopted it, according to estimates from Eilers & Krejcik. For casino operators and book makers, mobile gambling is attractive because it makes placing bets easier and allows for in-game wagering, seen as a strong growth area.

The stakes extend beyond the gambling industry. Professional sports leagues and television networks stand to gain from increased viewership of sporting events, with research showing bettors consume more games and more minutes of sporting events than those who don’t.

Online sports gambling has been legal in Nevada since 2011 and has grown to represent nearly a third of all wagers in the state, according to analysts’ estimates.

But as sports betting legalization moves forward in other states following a May U.S. Supreme Court ruling, there has so far been wide variation in the adoption of mobile. Some states are concerned about how online sports wagering could affect the business of existing casino operators or worsen gambling addictions.

Seven states have regulations to allow sports betting since the ruling, but only three have provisions to allow for mobile wagering. New Jersey and West Virginia are expected to start allowing online bets by the end of the summer, while Pennsylvania’s timeline is unclear.

New Jersey will allow age-verified bettors to sign up remotely without ever having to walk into a casino or racetrack. European sports-betting operators—including

William Hill

PLC, Paddy Power Betfair PLC and Bet365 Group Ltd., which see the newly opened U.S. market as a huge expansion opportunity—have struck deals with existing New Jersey casinos and could roll out mobile betting platforms in time for the National Football League season.

Increasingly, gamblers in other countries are placing wagers from their smartphones.

Increasingly, gamblers in other countries are placing wagers from their smartphones.


Photo:

isaac kasamani/Agence France-Presse/Getty Images

These sports-betting operators aim to offer the same kind of real-time wagers during live sporting events that have been available to those in the U.K. and other parts of Europe for years. Many of those options have been on display throughout this summer’s FIFA World Cup tournament, where fans can suggest in-game bets to book makers on

Twitter

as a match is under way or guess how many goals might be scored when a match goes into extra time.

Matt King,

chief executive of FanDuel Inc., a daily fantasy sports operator that is moving into sports betting and was acquired by Paddy Power Betfair since the Supreme Court decision, said there could be added benefits for states that consider mobile betting.

“We can really maximize the opportunity and also maximize the tax revenue,” he said.

Lawmakers and regulators in other states have taken a more cautious approach.

In states such as Mississippi, sports betting will be confined to casinos and racetracks across the state, though customers will be able to bet on a phone while there. Other options could include a system such as Nevada’s, where customers have to first register in-person at a casino or another betting storefront before being able to use mobile. So far, fewer than 20 states have yet to approve or consider any regulations for sports betting.

Joe Asher,

chief executive of William Hill U.S., which has been operating in Nevada since 2012 and now sees 60% of its bets there come from smartphones, said he expects that some states will move at a different pace than others, but most will eventually see the huge opportunities in mobile.

“This will be the biggest legal sports betting market in the world, just based on population and the wealth of Americans,” he said. “It’s just going to take time to develop, and it’s not going to happen overnight.”

Write to Chris Kirkham at chris.kirkham@wsj.com