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On November 7, the New Jersey Division of Gaming Enforcement (DGE) opened the doors for New Jersey sportsbooks to start taking wagers on eSports competitions.
The DGE made the move ahead of the League of Legends World Championship, which was held last weekend in Paris. Soon after, the FanDuel Sportsbook started taking bets on the tournament.
Esports wagering has been legal in Nevada since 2016 and with more states legalizing sports betting, more sportsbook operators will likely allow eSports betting in the near future. Over two million people streamed the finals of the Fortnite World Cup, while the global esports audience is expected to rise another 12% to 443 million viewers in 2019.
In a recent report, Goldman Sachs indicated that by the year 2022 eSports would have the second-highest viewership in the United States, behind only the NFL.
Pro sports franchises and gaming companies in America have already joined the fray. The NBA unveiled the NBA 2K League in 2018 and became the first US major league to have an affiliation with an eSports venture. Caesars Entertainment and MGM have also funded betting sites that have eSports wagering options for various competitions.
For companies that operate online casinos, eSports is a way to get younger players on board. A recent Forbes report showed the average fan of eSports is an educated, millennial male who makes around US $70,000 a year and tends to shy away from the more typical entertainment avenues such as TV and movies in favor of streaming platforms and technology-based entertainment.
Major networks and their advertisers at such mediums as ESPN, NBC, and ABC have discovered the eSports boom as well. According to Goldman Sachs, 14% of revenue from video gaming will come from advertisements by 2022 and some 40% will come from media rights.
In 2019 the video game industry has expectations to have sales of $150 billion. Competitive gaming is only expected to generate $1.1 billion of that, but some gaming experts see eSports wagering as an under-appreciated part of the industry’s success. In 2016 the amount bet on eSports in competitions around the world was $5.5 billion, and it is projected that number will have doubled by the end of 2019.
According to Eilers & Krejcik, “While our base case for total amount wagered around esports in 2020 ($12.9bn) sounds lofty, the conditions required to achieve that level of handle are actually quite modest. The total unique players our model calls for (~6.5m) is a fraction of the projected size of the global esports fan community in 2020. The annual average handle (total amount bet, not lost) required from each (~$2,000) is far below the handle of an average traditional sports bettor, poker player, or casino customer.”