The answer is basketball, of course.
Or maybe football, depending upon how you slice and dice the data. In either case, baseball runs a steady third in the recently legitimized world of sports betting, where Americans wagered an estimated $120 billion in 2023.
Federally legalized six years ago, the young industry continues to explode across the U.S. landscape, with Vermont and North Carolina approving their rules in January and March, respectively. But the stuttering ramp-up, battered by a pandemic and jumbled by a state-by-state rollout, has made the industry difficult to track.
Sports Betting Boom
As the Boston Celtics and Dallas Mavericks wrestled through the NBA finals this past week, advertising for the gambling industry's two heavyweights, DraftKings and FanDuel-owner Flutter Entertainment was in overdrive. Actual sports betting expanded nearly 30% from 2022 to 2023, according to the American Gaming Association, despite the patchwork of states' laws governing the industry.
"Sports betting really was kind of an incredible success story," said Ryan Butler, a senior analyst and editor at Covers.com, which provides sportsbook statistics, databases, betting data and analytics. "You're looking at almost 40 states that have some sort of legal sports betting, and in about five, six years, it's a pretty quick turnaround."
Sports betting was effectively federally outlawed in the U.S. until May 2018. That's when the Supreme Court struck down the 1992 Professional and Amateur Sports Protection Act. The PASPA banned sports betting, with just a few exceptions for lotteries in Oregon, Delaware and Montana, as well as licensed pools in Nevada. As of May this year, sports betting is live and legal in 38 states and Washington, D.C.
Difficult Data
The industry does not make it easy to determine to which sports the money is flowing. A spokesperson for FanDuel told IBD that they are not able to share data on their wager or betting distributions. A DraftKings representative also said they were not able to disclose their figures.
Sportsbooks report their betting figures to the state at the end of each month, Beth Kaufman, director of communications for the Illinois Gaming Board told IBD. In Illinois, the IGB's Revenue Accounting team reviews the reports, which are also subject to auditing under IGB regulations.
States where sports betting is legal release those figures, typically through their respective gaming or lottery commissions. But the amount of information reported varies greatly. Most states like New York only report the total wagers, gross revenue, tax contributions, and individual sportsbook or casino performance. There are only a handful of states that actually reveal breakdowns by sport. But even those reporting methods can differ widely.
Shannon Gray, communications supervisor for the Colorado Department of Revenue Division of Gaming, noted that Colorado only provides figures on wager and revenue distributions for the top 10 sports to avoid violating confidentiality requirements as part of the state's sports-betting regulations. Rules also prohibit the division from releasing individual operator data.
Extrapolating Reports
Ed Birkin, senior analyst with H2 Gambling Capital and director of H2 North America, says that the data can be spotty, with different states reporting different levels of information. H2 offers market intelligence, data analysis and consulting services for the sports betting, gambling and gaming sector.
It uses state-level reporting to estimate the breakdown of the sports wagering handle and gross win by major sport. "Handle" refers to the total amount of money wagered either through a sportsbook, on a sport or in a specific bet or category.
"There is only partial data available," he said. "Not all states report data at the level of individual sports, and those that do so report their data in different ways."
Still, there is enough sample data reported by a handful of states to ascertain a reasonable estimate of the split between major sports categories, Birkin says. The caveat though, is that the seasonality of each individual sport season and the timing of new state launches skews the amounts wagered on different sports.
In particular, 2019 and 2021 were outliers due to states launching midway through the year. That benefited sports with seasons later in the calendar, such as the NFL. 2020 was disrupted due to the coronavirus pandemic, postponing major events like the Olympics, canceling the NCAA basketball tournaments, and affecting major sports leagues around the world.
Birkin says 2022 and 2023 are a truer reflection of the data splits. And despite the gaps in data, available information shows that — surprise — football and basketball dominate the sports-betting landscape.
Football: The 'End All, Be All'
"Sports betting interest is absolutely proportional to the popularity of the sport," Butler said. "In the U.S., it's football, especially NFL football. It is the end-all, be-all."
Actually, the raw data shows that basketball generates the highest gross handle — dollars wagered. There are 30 NBA teams that play 82 games per season, offering bettors 1,230 chances to bet on regular season games — not including the playoffs or finals. But on a per-game basis, the NFL rules. Its 32 teams play 17 games each. Bettors only have 272 individual events on which to place bets during the NFL regular season.
However, it has the highest per-event average among the major sports.
The NFL is what drives sportsbooks, and its wagers are the most optimized from the sportsbook's perspective, Butler said. "They spend the most resources on making those lines perfect. That's where they have the highest margins."
Professional sports bettors that Butler has spoken with have named football as the hardest to win, he said. "So the sportsbooks like that, and that it's the most popular sport in America."
Targeted Strategy Generates Options
Sportsbooks commit the most resources to the most popular sport, a strategy that provides a wider variety of betting options for players. But that also reinforces the fact that the popular sports, such as football, basketball and baseball, see the most bets.
Despite the stark contrast in number of games, H2 Gambling estimates that football wagers represented 20% of the total $122.47 billion handle for U.S. sports last year.
Including parlays, basketball and baseball represented 25% and 13%, respectively, of the total handle last year. All other sports made up 20%. Parlays represented 22% of all wagers last year.
Excluding parlays, football represented 26.3% share of the total handle in 2023, H2 Gambling data shows. Basketball accounted for 32.4% of total wagers, with baseball at nearly 16%. All other sports accounted for roughly 25.3% of the total handle.
"It's just because of the sheer number of games that are going on," Butler said. "And then everybody else is just kind of fighting for scraps after that."
There are similar trends in Europe and across international betting, with the most popular sports dominating wagers, Butler says. Soccer, cricket, tennis, boxing, rugby tend to be among the most bet-on sports abroad.
State Samples
Illinois is among the few states that report data for each of the major sports. IBD studied data between January 2022 and March 2024. However, the figures are still approximations due to the timing of different sports leagues throughout the year. Illinois combines its college and professional betting numbers.
Parlays are by far the most popular betting option, representing 59% of all wagers placed during the time period. However, they only made up 26.1% of the total handle.
Basketball saw the most money bet on its games, even including parlays with 26.7% of the total handle. Meanwhile, basketball games accounted for 13.1% of all bets. Excluding parlays, basketball bets made up 31.9% of all wagers and 36.2% of the total handle.
Football had a 9.6% share of the state's online wagers including parlays, but a 23.5% share without them. And even with the shorter season, football had a 14.3% share of the total handle. Excluding parlays, football made up 19.4% of the total handle.
America's Favorite Sport Ranks Third
Baseball is the third most-popular sport based on the number of wagers and handle, at about 13% each, excluding parlays.
Without parlays, tennis bets represent 11.3% of the total handle and 7.4% of the total bets. Including parlays, tennis represents about 3% of the total bets but 8.3% of the total handle. Soccer was the fourth most-popular sport by bets and handle. Motor sports like Nascar and Formula 1 only made up a fraction of the total bets and handle.
Colorado breaks out the top 10 sports by wager amounts each month. The numbers include college football and basketball whenever they're in-season.
NCAA basketball made up 17.3% of Colorado's handle in March. Parlays and combination bets increased about 2% year over year to 20.9% in March. With the NFL season out of the way, basketball made up about 39% of the state's handle.
For Colorado in February 2024, NFL represented 5.5% of money wagered, despite just a few playoff games and the Super Bowl remaining. Basketball dominated with a 42.8% share during the month with the NBA season in full swing.
Rough Trends In Sports Betting
Illinois data from 2021 through 2023 pointed out some rough trends. Again, the data is imperfect because some leagues were still returning to normalcy after the pandemic.
Bets placed and total amount of money wagered during the period generally rose across the board. Hockey and soccer are two exceptions. Each saw their total number of respective bets increase from 2021 to 2022, but decline in 2023.
Motor racing saw its total wagers rebound in 2023, but the amount of bets placed was still below its 2021 levels. Like soccer, its handle has trended higher.
Parlay wagering in Illinois leapt to 60.2% of the total bets placed in 2023. That was up from 48.4% in 2021. Although parlays are by far the most popular type of bet to place, they account for fewer dollars. Parlay wagering's share of the total handle increased to 27.9% in 2023, up from 21.9% in 2021.
That's comparable to the handle share for basketball, which fell to 23.7% in 2023 from 27.1% in 2021. However, basketball only represented 11.42% of all bets placed in Illinois last year, falling from 16.5% in 2021.
Football wagers accounted for about 15.3% of the state's total handle the past two years, falling from 18.3% in 2021.
Betting On Star Power
Major superstars also attract betting interest, but the overall impact is limited.
When soccer player Lionel Messi, for example, joined Inter Miami, "the betting action for Inter Miami games was much higher than it was before," said a sportsbook insider who requested not to be named. "I wouldn't necessarily say that there was a big increase in MLS betting, it was really just the Messi games."
Caitlin Clark is having a similar effect on the Indiana Fever in the WNBA. There has already been an increase in bets on Fever games and wagers for Clark to win the Most Valuable Player award, the sportsbook insider said.
"There's certain players that are so electrifying that they'll draw interest from bettors, even for these so-called smaller sports," they said.
South Carolina's NCAAW basketball championship victory over Iowa and Clark in April was the most bet women's sporting event of all time for DraftKings, FanDuel and BetMGM, the sportsbooks told ESPN.
In terms of athlete popularity, BetMGM reported that baseball sensation Shohei Ohtani received the highest number of bets in 2023. NBA superstars Nikola Jokic and LeBron James ranked second and third last year. BetMGM's top 10 list of most wagered-upon players was evenly split between NBA and MLB players.
BetMGM sportsbook users placed the most money on Jokic and James, as well as the Boston Celtics' Jayson Tatum, who ranked sixth in tickets.
Eight basketball players ranked in the top 10 in terms of handle last year at BetMGM. Josh Allen and Patrick Mahomes were the lone representatives from the NFL to crack the top 10.
But the NFL playoffs dominated as the most bet-on events of 2023 for BetMGM's sportsbook. Super Bowl LVII, the Bengals vs. Chiefs AFC Championship game and the 49ers vs. Eagles NFC Championship Game led in terms of wagers and handle.
The Big Game(s)
February's matchup between the Kansas City Chiefs and San Francisco 49ers in Super Bowl LVIII in Las Vegas generated more than $1.3 billion at registered sportsbooks in the U.S., according to data compiled by Legal Sports Report. That topped last year's record by roughly 20%.
"The Super Bowl every year is the most-bet event on the U.S. sporting calendar," Butler said. "That's why they (the sportsbooks) have hundreds and hundreds of bets."
The Super Bowl features plenty of novelty bets as well, ranging from the outcome of the coin toss to the Gatorade color for the winning team. DraftKings offered a selection of bets themed around Taylor Swift called "For The Swifties," capitalizing on the singer's relationship with Chiefs tight end Travis Kelce.
"They have so much invested in it because they get so much handle in return," Butler said. "We won't see nearly as many exotic prop bets on your less-popular sports, just because the cost benefit isn't worth it."
Among other major sporting events, the American Gaming Association estimated March Madness would generate $2.72 billion in legal wagers in 2023 across the men's and women's tournaments, representing 2.2% of the total U.S. handle.
For comparison, Americans planned to wager an estimated $1.8 billion on the 2022 FIFA World Cup women's football season, the AGA reported.
This year's Kentucky Derby week saw its total handle hit a record $446.6 million, up from last year's record $412 million, according to Legal Sports Report. Meanwhile, The Athletic estimated one in eight American adults would bet on the Kentucky Derby.
The Next Playing Fields
There are about 10 states left that have not yet legalized sports wagers. The holdouts include major states such as California, Texas, Minnesota, Missouri and Georgia, which Butler says are of obvious major interest.
"You have big populations and established college and professional sports programs, there's a lot of interest from the industry," Butler said.
The gambling industry is less interested in states like Hawaii with smaller populations, or in places such as Utah, where a strong population of religious adherents makes passage more challenging.
Sports betting remains a contentious political issue in states with a conservative bent, like Texas, as well as liberal strongholds like California, with concerns regarding the impact on lower-income residents and those subject to addictive effects of gambling.
It's unclear which state will be the next to legalize sports betting. Alabama's gambling legalization efforts failed in May, according to Legal Sports Report's bill tracker. The Georgia House was unable to pass a gambling bill in its March session. Mississippi and Minnesota both had sports betting proposals fall apart this year. Meanwhile, the Texas legislature will discuss a sports wagering bill next year.
However, U.S. sports betting is already on track for a record year.
The U.S. commercial sports betting handle leapt 23.3% to $36.86 billion in the first quarter, the AGA reported. That slowed from the 38.5% year-over-year increase in Q4, which saw a record handle of $41.24 billion. Gross sports betting revenue in Q1 soared 22% to $3.33 billion, a record for the first quarter and shy of the all-time high of $3.52 billion from the fourth quarter.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
