7 Factors of E-Sports That Scare States Considering Legal Betting

Map of the United States on Left and a Team of E-Sports Competitors on Right

The phenomenal growth of sports betting in the United States has everyone wanting a piece of the pie. E-sports is one of the top sports trying to break into the scene.

The states and sportsbooks have been slow to make meaningful progress in e-sports. The states have a ton of unanswered questions.

The primary obstacle is that states can’t answer these problems without a larger sample size. The demand appears to exist.

But the states in line to legalize sports betting remain on the fence. Here are 7 factors of e-sports that scare states considering legal betting.

1 – The Age of the Athletes

A major hurdle for e-sports is the age of some of its athletes. Many professional e-sports competitors are minors.

It’s not unique for minors to break into professional sports. Yet, the volume of e-sports competitors under 18 is high. Much higher than anything you’ll see in sportsbooks.

The ethical question of betting on these underage athletes is an easy one for some states. Indiana has banned e-sports betting.

Across the United States, any betting on high school athletics is taboo. From the federal level down to the states, high school athletes are shielded.

There’s an intense level of scrutiny that comes from sports betting. Most professional athletes learn to stay above the noise.

That mental toughness is what separates them from the guys that almost make it. Most of them also have the benefit of age. There’s a tremendous amount of maturation between your teens and early twenties.

Perhaps that’s why New Jersey only allows e-sports betting on events with an adult-only field.

Many states are still weighing whether e-sports betting is ethical. The age factor scares lawmakers for a good reason.

2 – The Only Sample Size Are Major Events

States are scared away from esports betting because of a lack of information. The sportsbooks are only offering lines on the major events.

Lawmakers in states considering e-sports betting need a better sample size. It’s easy to see how traditional sports betting impacts a market because there are tons of sports games to gamble on.

Every day gamblers have their choice of MLB, NHL, NBA, or NFL games. That gives states a clear picture of what they can expect by opening up sportsbooks.

Sportsbook Booths and TVs

Aside from the three major e-sports events, e-sports aren’t prominent in sports betting. There are reliable sportsbooks online, but that’s not going to sway state lawmakers.

2021 was a banner year for e-sports. The previous year saw professional sports leagues shut down due to a pandemic.

That left a major hole in the sports betting world, and e-sports stepped up to bat. When the major leagues came back, e-sports went straight back to being an afterthought.

If e-sports can gain exposure through major television contracts, it will become legitimate. The fanbase is vast and fiercely loyal.

Whether they are sports bettors remains to be seen.

3 – States Are Reluctant of the Unproven Market

The continuing proliferation of sports betting is fantastic. Since 2018, 48 states have legalized sports betting or are on the path to legalization.

That’s a massive shift in the way state lawmakers view sports betting. Citizens seem to be jumping on board, and sportsbooks are enjoying record profits.

One advantage of traditional markets is that they have been legal for many years. That gives the lawmakers a tremendous sample size to dissect.

The NFL, NCAA, NBA, NHL, MLB, NASCAR, and the PGA Tour, have been in sportsbooks for years. That allowed legislators to comb over every aspect of the market to find best practices.

E-sports remains unproven in many ways. That scares states because it leaves too much uncertainty. Without a large sample of how the market flows, it’s a gamble.

When facing something like legalized gambling, it helps to have a proven market. E-sports fever is sweeping the globe, but it remains well behind the major markets.

4 – The Fanbase Leaves Much to Be Desired

The e-sports fanbase leaves a lot to be desired regarding legal gambling. As you can imagine, a significant part of the fanbase is well under the legal gambling age.

Don’t get that twisted; the average e-sports fan falls around 25 years old. Still, by legalizing e-sports betting, you’ll cut out a large portion of fans.

Then there are the financial considerations to weigh. The average age for a traditional sports fan is around 40.

Why does this matter?

Because the median net worth of Americans under 35 is $14,000. The median net worth in the coveted 35-44 demographic is over $90k.

Empty Sports Betting Lounge

The average sports fan has more disposable income than the average e-sports fan. I’m talking purely about the ages of players. That’s not an attack on people under 35; I know you’ve got plenty of money.

Still, a portion of the fanbase is excluded for age, and others have less money to spend. The market for e-sports isn’t as appealing to lawmakers as traditional sports betting.

Then you must consider the demand by e-sports fans for legal betting. There isn’t a giant swell of support by the fanbase pushing for legalized wagering.

E-sports fans may be content with mere fandom. They’ve already got a hobby, video games.

That’s a significant factor that needs to be considered. Many sports bettors aren’t playing the games they’re betting on anymore.

Many did at one time, but you can only play baseball or football for so long. E-sports fans can watch an event, fire up the PlayStation, and mimic the action they just watched.

In some cases, the fans can even compete alongside the pros. That could be enough action to keep e-sports fans from becoming e-sports bettors.

5 – Sports Betting is Popular Enough

States are staying away from e-sports because of the success of sports betting. Many people believe that states want to generate as much revenue as possible.

However, the tremendous amount of money pouring in from sports betting may be good enough. Some states aren’t interested in muddying the waters.

Adding e-sports betting could damage the entire industry if there’s an issue. States are opting to play it safe by ignoring e-sports.

The approach seems to be “If it isn’t broke, don’t fix it.” That will work, but only for so long.

If states fail to keep up with the changing times, they’ll have to play catch up. Fortunately for them, politicians are notorious for dragging their feet.

So, any changes on the horizon should give them plenty of time to prepare.

The demand for sports betting was incredible. The casinos were spending a ton of money to push for legalization, and citizens were vocally in favor.

That made for an easy decision. Without the same amount of demand for e-sports, it almost becomes a moot topic.

If the juice isn’t worth the squeeze, states won’t make a move on e-sports.

6 – The Sportsbooks Aren’t Clamoring for the Chance

It’s no secret that sportsbooks will push for action anywhere they can make money. Yet, it wasn’t until 2020 that many sportsbooks petitioned for e-sports.

That illustrates one colossal concern to the states. Sportsbooks don’t consider e-sports essential to their bottom line.

The lack of demand from the sportsbooks isn’t going to press states to legalize e-sports betting. That’s especially true when you weigh all of the other fears surrounding e-sports.

Two Laptops Showing Sports in Front of a Pile of Money

Sports betting is still a fringe market. Online markets seem to survive but aren’t thriving.

The states legalizing sports betting are only going to open markets with demand. Without a fundamental shift from the sportsbooks, there’s no cause for action.

Until e-sports has the demand of other lower-tier markets, it will remain on the sidelines.

7 – There’s Not Enough Money at Play

The most significant fear factor for states is that the money isn’t there in e-sports betting. From the fans to the sportsbooks, there’s uncertainty.

States must spend a lot of money to open a new betting market. Without any guarantees of a valid return, politicians are wary.

They’re correct to approach with caution. In 2020, e-sports accounted for less than 1% of the vig for sportsbooks.

That year saw the major sports shut down completely. There was such a void that sportsbooks began taking action on the weather.

Yet, e-sports barely made an impact on revenue for sportsbooks. Albeit, it outperformed the weather.

Our Thoughts About Betting on E-Sports

In recent years, e-sports has blasted onto the global scene. It has fans in nearly every country and is snowballing.

Unfortunately, that doesn’t make it a guaranteed moneymaker in the sportsbook. Without the casinos pushing for legal esports betting, it won’t happen.

If casinos see a demand for e-sports, they’ll make it happen. Otherwise, it will be a niche with a handful of online options.