March Madness: A US$16 billion betting opportunity that should not be missed

An estimated 17.8 million Americans will make a bet online (+206% vs. 2019), and 8.3 million will spend their money at a physical bookmaker (+79% vs. 2019).

The NCAA March Madness Tournament is the heaviest bet event in the U.S. In 2019 (2020 event wasn’t possible to occur due to COVID-19), an estimated US$8.4 billion was wagered on the college basketball tournament both at legal and offshore sportsbooks. Expectations jumped for the 2021 tournament. The American Gaming Association (AGA) estimated that 30.6 million people would place a bet sometime during the tournament, with an estimated US$15.9 billion being wagered on the event. In 2019, 17.9 million people placed bets on the tournament. Regarding to this 2021 Championship odds, the Gonzaga Bulldogs are leading with +150.

According to a report from Odds.com, legal sports betting is taking a stronghold on sports fans across the country, and the impact is beginning to be felt with events like the March Madness tournament bringing so many eyes to it. Across the U.S., states do not have legal sports betting, and college sports fans cannot partake in the betting fun. However, some states allow legal sports betting, but they can’t bet on college sports (Oregon) or can’t bet on in-state schools (Illinois & New Jersey). The inconsistencies of early sports betting in the country have had an impact on college basketball’s postseason tournament.

WHAT IS MARCH MADNESS?

March Madness refers to that time of year (usually, mid-March through the beginning of April) when the National Collegiate Athletic Association (NCAA) men’s and women’s college basketball tournaments are held. Why is it madness? That term somehow captures the excitement that swirls around the sports world, as tournament time approaches. In the weeks leading up to the “Big Dance,” as it is called, hundreds of college basketball teams from all over the United States fight to earn a spot in the tournament.

The first NCAA Division I men’s basketball tournament was in 1939, and included just eight teams. Now, in this 2021 edition, the NCAA college basketball tournament is a single-elimination tournament that features 68 teams trying to survive three weekends of games to be crowned the national champions. This year, the tournament (and betting possibilities) is taking place in Indiana, from March 18th (first round) to April 5th (final).

A BETTING VARIANCE

Like when trying to bet on a sport for a full season, there is a variance endured throughout the year. There are hot and cold streaks that someone will go through to finish positive at the end of the year when the work is put in. Well, that variance is being felt in the betting industry, where states with no sports betting can’t get in on the action unless they go offshore or to a local bookie. The opportunity is always felt with an event like March Madness, and it raises the question about either expanding sports betting to allow college sports or legalizing it entirely.

States like Texas are missing out on a huge opportunity with legalized sports betting. Six Texas schools made the tournament this year, including the Baylor Bears, a one-seed and favorite to make it to the Final Four. However, these teams’ fans can’t bet on the tournament or even their teams during the postseason. The Pacific Northwest is asking the same questions this month. Between Washington State and Oregon, four schools are playing in the NCAA tournament. Washington has been looking to expand sports betting outside of the tribal casino that has it, and Oregon does not allow for betting on college sports.

SPORTS ARE A WINNING BET

The opportunity for these states could be huge. In Illinois, the Land of Lincoln has seen Wisconsinites head to the state to get action in on the tournament’s opening weekend since Wisconsin does not allow sports betting. Fortunately, Illinois allows for sports betting on the tournament, but bettors cannot place bets on Illinois schools. Someone would have to head to Iowa or Indiana to do that. This year, Illinois was a number one seed and had an incredible ending to the regular season, and won the Big Ten title. The amount of money that would have come in could have been huge for the state. The other school, Loyola Chicago, is also making noise at this tournament.

Last Sunday, Loyola Chicago upset Illinois in the Round of 32 in the tournament. The betting market hole was felt as two in-state schools could’ve drawn a huge handle for the game. Loyola dominated Illinois wire to wire in the matchup. Sportsbooks most likely would have cleaned up as bettors tried to live bet Illinois during the game as they fell behind, and at halftime, as the one-seeded Illini tried to make a comeback in the game.

The sports betting industry is trending in the right direction and continuing to do so for years to come. However, there are still holes with growth in the U.S. that suffers from variance similar to what bettors face during a season. The goal is long-term growth and profit, and it looks like the industry is still a winning bet.