Online Sports Betting Industry Looks Strong Heading Into Super Bowl Weekend

It doesn't matter how hard the National Football League and the U.S. Congress try to contain the online betting industry; the demand for online betting remains high in the States, and that will be more evident than ever after what's expected to be another record-breaking weekend for Super Bowl betting.

"Online gambling has become the preferred method of betting on the Super Bowl as more consumers recognize the convenience and safety of Internet sports books."

- Stuart Doyle
BetWWTS

Analysts expect online sports books to take in a combined $450-$600 million in Super Bowl bets over the weekend. That's compared to $400 million in 2004 and $250 in 2003.

Sebastian Sinclair of Christian Capital Advisors believes this year's NFL championship game will yield a new high-water mark of about $450 million this year, with the rate of growth slowed by advertising in the United States.

"The clampdown on advertising will have an affect this year," said Sinclair, who has followed the online gambling industry since its inception, "but it will still be a major event for online operators, and the legal business in Nevada will be dwarfed by what is done online."

In comparison, Nevada's 165 licensed sports books recorded $81 million in Super Bowl turnover last year, and that was a record.

One online operator suggested that his site took as many bets on the 2004 Super Bowl as all of the land-based Nevada books combined.

"The Nevada books have a serious critical mass issue that we just don't have," he said.

The Wireless Factor

As in years past, online operators are looking at the Super Bowl as an ideal opportunity to acquire new customers as well promote enhancements and other features that make their services unique.

World Wide Tele-Sports, operator of BetWWTS.com, is heavily promoting its wireless wagering platform, which was recently upgraded to be compatible with more than 600 types of mobile devices. Users can download a software application to their phones and place bets using the platform, which was developed by PhantomFiber.

Gambling on wireless phones in itself is expected to become a multibillion-dollar business in the next five years. Paul Skeldon, a senior analyst with Juniper Research, predicts that mobile gambling worldwide will grow from almost nothing in 2003 to $16 billion in 2008. Skeldon projects that U.S. gamblers will spend more than $2 billion on mobile gambling in 2008.

"Books that rely on the outcome of the Super Bowl to be profitable for the year have gambled themselves out of business by now"

- Rob Gillespie
Bodog.com

BetWWTS's wagering director, Stuart Doyle, said the emerging market of mobile betting prompted his company to roll out its expanded service in time for this year's Super Bowl.

"Each year, the Super Bowl draws the heaviest betting action of any sporting event in the world, with a majority of the game's followers having some type of wager on the game," Doyle said. "Online gambling has become the preferred method of betting on the Super Bowl as more consumers recognize the convenience and safety of Internet sports books."

Doyle expects nearly $2 million in Super Bowl turnover for WWTS this year, with a "small portion" of that coming through mobile devices.

"In the future mobile betting will become a bigger part of our business," Doyle said, "and we felt it was necessary to upgrade our system to include a wider range of devices."

Internet Props

Rob Gillespie, president of Bodog.com, expects his company's sports betting business to take in about $9 million in Super Bowl bets, with nearly a third of that on "prop" bets.

Proposition bets are an interesting animal for online sports books because there are limitless ways to combine sports bets (e.g. Will Kevin Garnett score more points and rebounds in his NBA game than David Paten will have receiving yards in the Super Bowl?) as well as entertainment bets (e.g. Which company will have the best commercial according to a poll conducted by USAToday?)--features land-based books typically don't offer.

Gillespie said the $3 million or so that will come in from prop bets on the Super Bowl will exceed total for prop bets made during the entire NFL season on BoDog.com.

WWTS, meanwhile, will offer as close to 350 different prop bets by the time the game starts, but Doyle says they won't be a huge driver for Super Bowl Sunday action.

A Strong Industry

While the rate of increase for Super Bowl turnover is expected to decline, the online wagering industry as a whole appears to be more stable than ever. Most bookmakers would agree that the big game is no longer about making or breaking an online sports book. Operators' survival in years past would often depend on the results of the Super Bowl, but this has become much less common.

"In talking to other book managers, there seems to be more and more shops whose approach to the Super Bowl is the same as ours: Don't lose any money," Gillespie said.

In the past, Gillespie said, some operations booked the game too aggressively and effectively wiped out an entire NFL season of hard work.

"Books that rely on the outcome of the Super Bowl to be profitable for the year have gambled themselves out of business by now--Ace's Gold for example," he said.

Doyle said most sites in operation today have proven themselves to their customers and the industry as whole.

"People know we aren't going to take their money and run away and hide in Antigua or anywhere else," he said. "This year will be an interesting one for the industry. I don't think anyone will go out of business after the Super Bowl, and that is saying something considering how bad of a year it was for a lot of books."

The outcome of the 2004 NFL season seems to have validated Doyle's point. A long run of wins for underdogs translated to sizeable losses for most online sports books, yet there were no cases of established Internet bookmaking operations going under.