Are Punters Turning to Esports Over Traditional Sports?

Esports are a relatively recent phenomenon which differs from traditional sports in that the games are virtual rather than physical. Esports contestants compete against each other in the context of a videogame rather than on a pitch, field, court or other sporting venue. For the competitors, therefore, there is a clear difference between the two. However, for the spectator, there are lots of similarities between watching sports and watching esports. Each involves rooting for a specific team or individual and observing experts in their field work to get the better of one another.

Making a Wager

For almost as long as there have been competitive games, people have placed wagers on the outcome. Having a personal stake in the result increases the excitement for the spectator. In recent years, betting on traditional sports has been accompanied by a new arena – betting on esports. Esports betting involves making wagers on the outcome of a videogame competition rather than a physical sporting event.

US Sports Betting

In the US, betting on sports and esports has been heavily restricted until recently. The federal ban on sports betting was struck down in 2018, leaving each state free to implement its own legislation on sports betting. Wagering on sporting events is now legal in many US states and there will likely be more to follow. Those in the US who wish to place a wager on a sporting or esports event may well be able to do so in 2020, but there are different rules and legislations in each state to be adhered to. States that have legalised gambling on sports include Michigan, New York, Pennsylvania, Colorado, Montana, Nevada and Oregon, although the process is one which will take time to allow full access. Residents of Michigan, for example, cannot yet place bets within the state, but technically gambling has been legalised. The casino infrastructure is in place and there will be sportsbooks affiliated with these casinos shortly, once the licensing process has been completed. Citizens of states including Florida and Utah are still awaiting new legislation to legalise sports betting.

Wagers on Sports

Despite restrictions, there have been ways for people across the US to place wagers on their favourite sporting events, with the tens of billions of dollars wagered on the annual Super Bowl event standing testament to this. The NFL is the most popular sporting league in the world in terms of people who want to gamble. Outside of the US, soccer is a clear winner when it comes to gambling revenue from sports, with an estimated 3.5 billion soccer fans worldwide. Tennis is another sport which attracts a huge number of gamblers, with this number increased due to the year-round nature of the sport. Horse racing is also popular, particularly major events such as the Grand National or Kentucky Derby races. A Nielsen sports study found that approximately 44% of sports bettors are aged 35 or under and 29% have household incomes in excess of $100,000.

Wagers on Esports

Until quite recently, betting on esports was more of a niche market, attracting fans of computer games rather than fans of gambling. However, esports betting has surged in 2020, with 40 times growth in the spring fuelled mainly by NBA2K and FIFA. Long-term growth opportunities are now being predicted for esports wagering by industry experts. The average esports bettor is a young professional aged between 26 and 35, sitting in a high-income bracket and having grown up with computer game consoles as part of life. With sports and esports betting having such similar demographics, it stands to reason that there will be a natural overlap. By 2022, forecasts suggest that there will be as many as 644 million viewers of esports, including regular and occasional viewers. This is over 50% more than the average number of current regular season American football viewers, excluding the Super Bowl.

The Difference Between Sports and Esports

While in betting terms there are many similarities between wagering on sports and esports, there are also several key differences. No-one anywhere can claim to be the owner of a traditional sport, whereas esports take place in virtual arenas that are intellectual property belonging to the game producers. The fan bases for esports are generally not location-specific, while sports fans often favour teams from their hometowns. Athletes make their money through playing the game and signing contracts with their teams, whereas esports competitors can make money through streaming events.

The popularity of esports is growing rapidly and there are already millions who enjoy watching competitive computer events, many of whom will occasionally or regularly place a wager on the outcome of those events to make it more exciting. At present, the number of esports fans pales in comparison to the number of soccer fans and it seems unlikely that esports will overtake traditional sports in terms of popularity among gamblers. However, increased internet access and the coming of age of a generation who have grown up playing computer games makes it highly possible that the growth of esports betting will continue on its upwards trajectory for many years to come.