The Impact on US Bookmakers of College Football Closures
August 21, 2020
Just this week, news came out that at least two of college football’s Power 5 conferences will not be playing football this fall. As the Big Ten and Pac 12 conferences opt out until perhaps the spring because of COVID19 pandemic concerns, a large body of college football fans will be reeling with disappointment. It remains to be seen just how many conferences and teams will actually make it to the gridiron in the coming weeks.
What does that mean for US retail and online bookmakers? The impact of having little to no action on college football is hard to estimate. It is important to remember that aside from Nevada, legal sports betting is still in its infancy throughout most parts of the US. Only one state, that being New Jersey, has ever been through an entire college football season with retail and online sports betting in place.
Here is what we do know. According to industry analyst Eilers & Krejcik Gaming, betting on college football has traditionally accounted for about 12% of the annual sports betting revenue as reported by the nation's bookmakers. While that sounds like a material number, the loss of said revenue would not cripple the US sports betting industry. If the NFL were to take to the sidelines as well, that could be a different story.
As for the NFL, there is a good chance that the volume of betting on NFL games could rise significantly enough to offset some of the business lost at the college football level. Entering the current NFL season, which remains on target to begin in September, sports bettors are ready to go. The pent up demand for sports betting access due to major sports league shutdowns is very evident after watching the nation's sports bettors react positively to the opening of the MLB season and the NBA "bubble" league.
Back to college football, it is nearly impossible to come up with a standard set of expectations. Until more states have taken their first legal college football bets, there is no data upon which to rely. Even if college football was headed into a full participation season, many of the states that have legalized sports betting for its residents have also banned betting on sports teams within their respective states. If sports bettors in Michigan cannot bet on Michigan and Michigan State games, it is impossible to estimate the impact the ban would have on revenue.
For now, bookmakers are taking a wait and see position.