Understanding the Esports Betting Scene in the US: An Interview with Dr. David G. Schwartz

Dr. David G. Schwartz is a gaming historian at the University of Nevada Las Vegas. He has written seven and edited four books in gaming history, and serves on several state and local groups, including the Nevada Gaming Policy Committee and the advisory boards of the Museum of Gambling History and the National Museum of Organized Crime and Law Enforcement (Mob Museum). 

Photo credit: Chris DeVargas

NGame: What is the current state of esports betting in the US?

Dr. David G. Schwartz: Esports betting is really at a crossroads in the United States. In addition to esports growing in popularity, states are looking for more money, so they’re expanding sports betting and esports betting is a subset of that. There are a few states that have already legalized or are in the process of legalizing betting on esports. 

NGame: What are the financial opportunities of esports betting for states?

Dr. David G. Schwartz: The financial opportunity, I think, is there, but it might not as big as many people — both people in the state governments and the proponents — would like to believe. I think it’s initially going to be a pretty small part of the total sports betting portfolio. If you look at Nevada, which has a long history of sports betting, most of the bets are on football, baseball and basketball. The other 10-12% of bets include boxing, UFC, golf, NASCAR, etc.

If esports betting could be 2% of sports betting, that would be huge. I think it’s going to start out small. So we’re talking hundreds of thousands or millions of dollars, not billions of dollars. I think it’s not going to be that huge to start, but nothing was. There was a time when not that many people were betting on football or basketball. 

NGame: Can esports betting be as big as sports betting in the future?

Dr. David G. Schwartz: One thing I’ve learned from studying history is that the way people gamble evolves with society and technology. At one point, people bet on foot races and Gladiator contests and stuff like that. They couldn’t imagine betting on a game where you put the ball in a hoop. Today, people bet millions of dollars on basketball.

I think esports is the same. If we went back 50 years and said people are going to bet on video games, they’d go, “What, Spacewar? No, never!” I think it’s going to evolve. Maybe not next year, but it will get there.

You’re going to need basically three things: 

  1. Governments that are willing to sanction it, which they’ll do for the tax money.
  2. You’re going to need to see operators willing to provide it. In other words, they can look at an esports competition and set a line (create odds) that is going to make the money. They have to understand the business, though. That’s the weakness of being a sports betting operator — if you [place bets], you can focus on one sport or one team. You might know more than the person setting the line. [The betting operator has] to offer lines in every game. If you imagine somebody having to offer lines on every major esports competition, it’s kind of hard for one person to keep up on all that. They’re going to need to get into the [esports] space aggressively if they want to offer lines.
  3. The third group is going to be customers. You have to have people who feel comfortable betting and want to bet on it. 

If you have all three of those, it will go well. Until you do, it’s not going to get off the ground in a meaningful way.

Written by HB Duran | Interview by Cody Daniels

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