What does the latest research on betting on sports and fantasy sports tell us?
Earlier this summer, the Fantasy Sports and Gaming Association (FSGA), formerly known as the Fantasy Sports Trade Association (FSTA), revealed new research from a study the group commissioned by market research company Ipsos.
The study sought to look at what type of overlap there was between fantasy players (both traditional season-long and daily fantasy) and sports bettors; as well as what trends can be gleaned from the New Jersey market roughly one-year on from the Supreme Court’s decision in Murphy.
The sports betting study background
The online study was conducted between May 15-27, 2019 within the United States.
Three groups were targeted:
- A general population sample
- National sports bettors or Fantasy Players
- New Jersey Sports Bettors or Fantasy Players.
The survey responses produced sample sizes of: 1,000, 1,966, and 712 respectively.
There are a few massive grains of salt that should be taken when looking at this information.
First, this is market research conducted via online surveys, while online surveys are generally reliable, these research tools can often see people respond with a more idealized image of themselves, or tailoring responses to what they think the survey administrators want to hear.
Respondents are also typically only paid for completed surveys, which can lead to individuals falsely claiming to qualify. Though online surveys are not a perfect research tool, they are highly cost effective and generally, with a sufficient sample size, reliable and valid.
Research, but market research
A second caveat is that this is not academic research. This means that whereas academic research is typically subjected to blind review and analysis by other experts, who effectively sign off saying what the researchers did was proper, market research serves a different objective and does not need to meet the same quality control standards (which it may or may not).
Finally, one would have expected to see larger sample sizes, in particular the general population sample (which would have been the cheapest of the three samples they collected). The small sample sizes make generalizing this study beyond the respondents in this particular sample difficult.
A closer look at the research
The research was conducted prior to the passage of a bill legalizing sports betting in Illinois, so some of the information was likely dated by the time the presentation was made.
The slide deck about the research raises immediate eyebrows when looking at a map of the country and showing states where “All, or almost all, [fantasy] operators are active in the state.”
We see that we still treat states like Illinois, where DraftKings‘ and FanDuel’s continued operation in the state resulted in a controversial cooling off period before they would be allowed to operate mobile sports betting in the state, as safe spaces for fantasy sports. (The attorney general in the state declared that paid-entry fantasy sports were illegal several years ago.)
The map is identical except for color choices to the one produced here on Legal Sports Report, though the Legal Sports Report map contains information when you scroll over the states, which qualifies the activity in states like Illinois.
There is purportedly a lot of gambling taking place
The Ipsos study found that of the general population sample (the one with 1,000 people), 24 percent were either a gambler or a sports bettor, with 19 percent identifying as someone who had bet on sports within the previous 12 months.
A more targeted finding on fantasy sports
The study’s extrapolation has also estimated that 45.9 million US adults have participated in a fantasy sports game. Interestingly, this number is lower than the 57.4 million that Ipsos previously found played fantasy sports back in 2016, but that sample included both teens and adults and was North America, as opposed to just the United States.
Not so shocking results on gambling
In a finding that should surprise virtually no one, gamblers and fantasy gamblers tend to participate in both traditional sports gambling and fantasy sports. Indeed, a strong majority participate regularly in both activities.
Of the 61 percent of people who are classified as crossover players playing both fantasy sports and wagering on sports, only one percent of them were exclusively daily fantasy sports players with far more engaging with sports betting than traditional fantasy. But 38 percent of crossover players participating in traditional fantasy sports, daily fantasy sports, and sports gambling, it’s almost like those activities have been related the whole time.
The NFL is king of betting and fantasy
Of the total group of sports bettors, 63 percent acknowledged having wagered on the NFL in the last year, followed in popularity by the MLB and NBA with 36 percent of bettors having wagered on these events.
Perhaps more interesting is that the average bettor is betting on 3.3 different sports, according to this study. Perhaps giving hope to the XFL and start-up leagues everywhere, the Arena Football League and Canadian Football League had eight percent and five percent of bettors placing at least one wager on games within the league in the last year.
Fantasy players are participating in what?
In looking at what fantasy sports are participants competing in, the obvious leader is the NFL followed by baseball and the NBA and then the NHL.
The results after that begin to raise some questions about survey accuracy, with 16 percent of respondents claiming to have played fantasy NCAA football in the last year, 11 percent claiming to have played fantasy NCAA basketball, nine percent claiming to have played fantasy Arena Football League contests, and five percent having participated in fantasy contests about The Bachelor, with a staggering seven percent of daily fantasy players claiming to have participated in a fantasy league about the ABC show.
A lot of people are purportedly betting more on sports
According to the survey results involving the national sample of sports bettors, 41 percent of people bet more on sports over the previous year, 40 percent of respondents played more fantasy.
The 41 percent is high, but perhaps not unexpected given that sports betting became legalized in various states, making it much more accessible to large segments of the population.
A lot of NJ sports betting
So, apparently New Jersey really likes betting on sports, as 26 percent of the state’s adults purportedly bet on sports in the last year. If we do some quick back of the envelope math with an estimate of New Jersey’s adult population being roughly 6.9 million residents, 26 percent would translate into 1.78 million people having placed a sports wager in the last year. That is a very large number. Additionally, the study claims that one in ten began sports betting in the last year.
The study did reveal an interesting result that fantasy players in New Jersey reported playing more fantasy sports in the year since the Supreme Court knocked down PASPA, with 52 percent claiming to have played more fantasy sports.
Of course, the study also finds that virtually half of the New Jersey sample are betting offshore, and a little more than 15 percent are using a bookie, probably indicating the need for New Jersey to do some work on recapturing the black market.
Is legal sports betting important?
A total of 78 percent of people who bet on sports in New Jersey said that it was important that “it is legal to bet on sports there.” That number shoots up to 84 percent for people who bet offshore, presumably illegally.
So, while we do not want to throw the baby out with the bathwater, online surveys can yield some results that are odd.
It does not appear that the tout industry is thriving in New Jersey, with only 12 percent of bettors claiming to use a tout service. That number drops even lower for new bettors — this sample size is so small it’s very difficult to make any generalizations about the group — to just seven percent.
Conclusions about the betting survey
While now only available via internet archive, the FSGA as its previous iteration the FSTA argued that fantasy sports is skill-based and is therefore not gambling.
Believing that being a skill-based game (like sports betting or Texas hold’em) renders the activity distinct from gambling, which is an overly simplistic view of the legal reality. The now-defunct organization similarly argued that the Unlawful Internet Gambling Enforcement Act purported to “clarify the legality of fantasy sports,” something that the statute did only for its own purposes, and not to modify any other state or federal interpretation.
The former organization further concluded that fantasy players behave differently than sports bettors, but the results of the new research shows that if they do, they may have split personalities, because there is a lot of crossover in consumption between sports bettors and fantasy players.