AGA study: $8.5 billion to be wagered on March Madness, although the bulk of the bets are illegal

AGA study: $8.5 billion to be wagered on March Madness, although the bulk of the bets are illegal

  • Howard Stutz, CDC Gaming Reports
March 18, 2019 8:28 PM
  • Howard Stutz, CDC Gaming Reports
  • Other

If you’re reading this story, you’re probably one of the estimated 40 million people filling out NCAA men’s basketball tournament brackets this week and throwing a few dollars into an office pool. It happens every year, in offices and other workplaces, all over the country.

It’s also illegal.

Technically.

The American Gaming Association said Monday that $8.5 billion will be bet on March Madness, with one-in-five adults – roughly 47 million people – placing some type of wager on the tournament. The vast majority of that sum is bet illegally, although it’s difficult for Morning Consult, which conducted the study, to determine exact illegal betting numbers.

The survey estimated $4.6 billion of the overall wagering projection will be spent on 149 million brackets, which are commonly offered through various online media channels, including ESPN, CBS Sports, Yahoo, and The Athletic.

Another $3.9 billion will be wagered through a sportsbook, online, with a bookie, or with a friend. Again, the largest percentage is estimated to be of the illegal variety.

“These results indicate there’s still work to do to eradicate the vast illegal sports betting market in this country,” AGA CEO Bill Miller said on a conference call Monday to discuss the findings.

The NCAA and various media outlets – notably ESPN, which dedicates a separate section of its Web site to college basketball analyst Joe Lunardi’s picks – heavily promote “bracketology” in the lead up to Selection Sunday, in which the 68-team tournament field is announced. This year’s Selection Sunday was yesterday.

AGA Senior Director of Research Dave Forman said the average person will fill out four brackets before Thursday’s opening rounds.

Tournament brackets have become part of the culture surrounding the event, said AGA Senior Vice President of Public Affairs Sara Slane, which makes the NCAA’s efforts to halt the expansion of legal sports wagering somewhat hypocritical.

“They know it’s all about fan engagement, and that the brackets are a huge tool for fan engagement,” Slane said. “It’s not beneficial to bury your head in the sand.”

The troubling numbers for the Washington D.C-based AGA are the 2.4 million people who will bet on the tournament illegally with bookies and the 5.2 million who will bet online at illegal and unregulated offshore gambling sites.

This year’s March Madness is the first to occur after the U.S. Supreme Court tossed aside the Professional and Amateur Sports Protection Act last May, allowing states to legalize and regulate sport betting. Seven states have since joined Nevada in allowing sports betting facilities to open in casinos and racetracks.

In the 10 months following the ruling, more than $5.9 billion has been wagered legally in the eight states. Another 23 states are currently considering sports betting legalization.

Miller said sports betting has become “a widely popular” entertainment model, but eradication of the illegal sports gambling market is the ultimate goal.

“While the illegal market persists, these numbers validate what most of us have known for a long time,” Miller said. “Americans like to bet on sports and Americans do bet on sports.”

Slane said legalized betting policies, including the addition of mobile sports wagering, “are the best way to shut down the illegal sports betting markets.”

She added it might take up to “three to five years” to determine how much legal sports betting will ultimately slice away from the illegal activity.

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter