What does a massive, multiday sports contest coupled with millions of people flush with COVID-19 stimulus checks lead to? Possibly a betting boom.
As the NCAA’s annual men’s basketball tournament tips off this week, sportsbooks and gamblers across the country are eager to cash in on the 19-day tournament known as “March Madness.” This year though, due to a perfect storm of factors, money is expected to be freer flowing than in years past.
ANTICIPATION
Sports fans have now been waiting two years for the Division 1 basketball championship, which was canceled last year just as the COVID-19 pandemic began ripping through the country.
The contest’s 2021 iteration is, in essence, the same type of tournament as in 2019, with a notable difference being the absence of large throngs of cheering fans (capacity has been capped at 25% and even less for some stadiums).
Crucially similar is the 68-team bracket system that allows those following along to game out what teams they think will advance with the opportunity to win money while doing so. People in states where sports betting is now legal can also wager cash on individual games.
Dr. Brian Marks, executive director of the University of New Haven’s Entrepreneurship and Innovation Program, told the Washington Examiner on Thursday that the lack of the tournament’s presence last year has the potential to drive up betting.
“I would expect the absence of last year’s NCAA March Madness to foster greater interest and attention in the event this year,” he said in response to written questions. “It is quite possible that dollars that were not otherwise wagered last year and with the absence of other opportunities could result in an increase in wagering this year.”
Johnny Avello, director of sportsbook operations for sports betting giant DraftKings, told the Washington Examiner on Thursday, just hours before the First Four games, that his company is “already seeing large demand” for betting during the tournament.
“There is a lot of different ways to bet this game, you can bet the spread and the money line and total [points scored],” Avello explained during a phone interview. “Then, we have player props and first-half and in-game wagering.”
STATES LEGALIZING SPORTS BETTING
The growing number of states that have legalized sports betting since the last March Madness tournament is also expected to drive up the number of bettors and the overall volume of money that will trade hands in the coming days.
In 2018, the Supreme Court ruled that the Professional and Amateur Sports Protection Act of 1992, which prohibited legal sports betting, was unconstitutional. That landmark decision opened the door to states legalizing sports betting and opened the wallets of potential gamblers across the country.
During 2019’s contest two years ago, people in only eight states could legally place bets during the tournament. The combined population of those states is less than 34 million.
As of Thursday, 25 states have legalized sports betting, with 21 of those states and the District of Columbia having operational betting markets. The combined population now living in places where they can legally place a bet on the tournament now surpasses 127.8 million.
Avello said that the growth in states legalizing sports betting across the country has not been slow, and while it is contingent upon state legislatures, he thinks DraftKings could pick up another three or four by the end of the year.
STIMULUS CHECKS
This year’s March Madness contest also happened to coincide with the third time in less than a year that millions of people woke up to find themselves a bit richer thanks to the federal government.
Checks begin at $1,400 for those making less than $75,000 annually, and while the funds are intended to help those suffering the maladies of the pandemic, some will invariably put that money right into the gambling market.
“In some instances, the payment is a booster shot to relieve the pandemic-induced economic crisis; for others, however, it is more than a booster shot, it is a kicker,” Marks said. “Those individuals may treat such funds akin to ‘manna from heaven’ and use for engaging in the stock market or, in this case, speculating and waging on tournament play.”
The phenomena of relief funds being used in a speculative capacity is not without precedent. After the second round of stimulus funds hit bank accounts, GameStop and other so-called “meme stocks” rose sharply as young investors with money to burn leaned into advice found on websites like Reddit.
Some 47 million people in the United States are expected to bet on this year’s tournament, according to research by the American Gaming Association. Additionally, an estimated 17.8 million will place a bet online, a 206% increase from 2019.
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Considering the combination of factors, what Marks dubbed a “perfect confluence,” U.S. betting markets may be in for a slam dunk of a March.
