LSR Staff Looks Into 2023 US Sports Betting Crystal Ball

As the legal US sports betting industry leaves behind a year full of twists and turns in 2022, there are sure to be more in 2023.

In many ways, it felt like the sports betting industry took steps forward in 2022, while at the same time ending up taking a few backward as well. There already are a few states lined up for launch (Ohio, Massachusetts) and a chance that a couple more legalize. There are also strengthening headwinds against the industry, ranging from growing regulatory pressure to media scrutiny.

The next year in US sports betting can go a lot of different ways, and it is impossible to tell exactly what might happen. But the LSR staff gives it a shot and lays out their best predictions for 2023.

Here come the heavyweights

ADAM CANDEE: This is the year for sleeping giants to awaken.

Will ESPN follow through on quote after quote about how its customers want sports betting? Disney’s well-known caution makes ESPN’s journey toward sports betting feel more tortoise than hare as the Worldwide Leader neither leads nor follows at the moment.

Will bet365 do more than slap a banner in center field at Yankee Stadium? Last year, a prominent industry insider told me 2022 would see bet365 launch in 10 states. Yet the global behemoth still sits atop dry powder as we enter 2023, perhaps to its benefit in a (relatively) more rational marketing environment?

Will Fanatics be the first to convert non-gaming customers into sports bettors after theScore, Barstool, and others stumbled with similar plans? Michael Rubin and his uber-business are far better capitalized and far more talented than any who previously tried to flip that funnel.

Perhaps Fanatics surprises on a tech stack that needs a win. Perhaps the convenience of an ESPN-365 mashup glows too brightly for both to ignore. One way or another, expect 2023 to stir the somnabulate heavyweights from walk to run.

Sports betting regulation appears

MATTHEW WATERS: This might be the year that the US sports betting industry starts to see a heavier hand from its regulators.

Last year closed with regulators in two states making headlines on their own. The Massachusetts Gaming Commission is being as thorough as possible with its application reviews and was not shy about calling out Penn Entertainment for some actions of its partner, Barstool.

The Ohio Casino Control Commission, meanwhile, could hand out fines to Penn and DraftKings for advertising missteps before the market even launched Jan. 1.

From a legalization standpoint, there are not a ton of states left, but it seems critical that two states get a sports betting bill passed. Kentucky is almost entirely surrounded by legal betting states after Ohio went live, with statistics from GeoComply showing strong activity around Cincinnati, a major market for Kentuckians.

The only place Kentucky is not bordered by a legal state is in its southwestern corner, where a sliver of the state bumps up against Missouri. That is the second state where legislators should be concerned about protecting potential tax dollars as they currently flow out of state from Kansas City, MO to Kansas City, Kansas.

Two more states enter the fray

PAT EVANS: Watching the dominance of FanDuel and DraftKings, and to a lesser extent BetMGM, so early in the industry, there has to be a big disruptor around the corner. Could that be Fanatics in 2023? Maybe.

More likely it feels like a major tech brand makes inroads as they have with every other aspect of life. Perhaps Amazon will pursue the recently reported sports-only app for streaming and eventually integrate a sportsbook into it. There are very likely too many hurdles for 2023, but I see it happening.

Beyond that, there seems to be two states most likely to legalize online sports betting this year: Minnesota and North Carolina.

Texas messes with sports betting

MIKE MAZZEO: Admittedly this is a bold prediction, but enough momentum occurs on the sportsbook lobbying and pro sports team ownership fronts for Texas to get legalize online sports betting.

For this to happen, Lt. Gov. Dan Patrick likely is going to have to be at the front and center of a push. So far, he hasn’t done that. But he also hasn’t said no yet either. And Gov. Greg Abbott has indicated a willingness to listen.

Both legislators just won re-election, too, hopefully emboldening them to change course on their previous anti-gambling expansion stances. Like the Texas Sports Betting Alliance lobbying group says, Texas is about promoting individual freedom and letting Texans make the choice to decide on the issue.

It would be a massive win for the industry to get the Lone Star State across the finish line.

Bye bye bye

SAM McQUILLAN: For a while now, we have been circling 2023 as the year sports merchandise behemoth Fanatics joins the fray. Underdog Fantasy and Betr have secured large investments as they eye sports betting as well.

But this year should actually be about exiting, not entering.

We saw Churchill Downs, FuboTV and MaximBet all exit the sports betting space in 2022, each failing to find a buyer.

Beyond proving how hard it is to compete as a new entrant, each short-lived venture revealed there is no ESPN type, an Amazon or Google waiting in the wings, ready to buy low on an existing sports betting tech platform or customer base … at least not anytime soon.

Some states are home to nearly two dozen sportsbooks. That is not sustainable, especially as new states launch, promotions dry up and the aforementioned larger financially-backed join.

My prediction: at least three more online sportsbooks will shut their doors in 2023, and if any tech giant makes the move to sports betting, it will be on its own fresh platform.