The upcoming Super Bowl is expected to generate a significant amount of betting activity, with some estimates suggesting that regulated sportsbook operators could see a handle of $1.5 billion or more for the big game. Macquarie analyst Chad Beynon believes that 10% of the more than 160 million adults in the US living in states where sports betting is legal will bet an average of $90 on the Super Bowl. This estimate leads to the forecast of a $1.5 billion handle, while the American Gaming Association (AGA) estimates that 68 million American adults will wager an average of $337 on the game, resulting in $23 billion in bets.
The difference between Beynon’s handle estimate and the AGA forecast is due to the latter including wagers placed with offshore sportsbooks, local bookmakers, and those placed in pools at Super Bowl parties.
It’s important to note the difference between handle and revenue for the betting industry. Handle refers to the total amount bet on a game, while revenue is the amount that gaming companies retain after paying out the winners.
As the Super Bowl approaches, the San Francisco 49ers are currently two-point favorites over the Kansas City Chiefs, with an over/under of 47.5. Beynon noted that despite the Chiefs commanding a majority of the bets and the money on the game, sportsbook operators are hoping for a 49ers win in a low-scoring fashion, as this would be the desired outcome for them.
The analyst also highlighted that publicly traded online sportsbook operators such as DraftKings, Penn Entertainment, and Rush Street Interactive could see high-single digit revenue growth upside or downside to consensus estimates depending on the Super Bowl outcome.
DraftKings, as the largest pure-play, US-based iGaming and sportsbook operator, is seen as a bellwether for the industry. Beynon believes that the Super Bowl could lead to as much as an 8% upside or 9% downside to consensus first-quarter estimates on DraftKings. This outcome would be significant for the North American online segments/companies, particularly for DraftKings and FanDuel which have a higher relative proportion of revenue derived from online sports betting compared to other operators.
Overall, the Super Bowl is expected to be a major event for the sports betting industry, with significant implications for both operators and investors.