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In the coronavirus sports void, these are the desperate bets gamblers are making

Key Points
  • The sports gambling industry may lose $140 million alone this weekend on lost NCAA basketball tournament bets and, according to the American Gaming Association, up to $43.5 billion in economic activity in the coming months.
  • Sportsbooks are getting creative: "If you can bet on it and we can book it, somebody is going to bet on it," said a casino manager in Las Vegas.
  • Some forms of betting have endured, such as virtual horse racing. Others are new, such as KHL Russian Hockey League, Turkish and Mexican Soccer Leagues, where Tom Brady would end up signing, and weather conditions around the world.
A worker cleans an escalator on Las Vegas Boulevard in Las Vegas, Nevada, U.S., on Tuesday, March 17, 2020.
Joe Buglewicz | Bloomberg | Getty Images

For Duane Colucci, Thursday should have been one of the biggest days of the year. Colucci works as assistant race and sports manager at the Rampart Casino in Las Vegas, where the opening weekend of March Madness serves as an annual gambling holiday, second only to the Super Bowl. But where guests would normally be eating, drinking and placing bets, the casino floor now sits empty. And Colucci sits on his couch at home.

"How do you prepare for a complete shutdown of major sporting events [and] any gatherings over 50 people?" Colucci said. "It's so hard to fathom. You can't prepare for something like this, especially in the race and sportsbook industry."

This is the "Viva Las Vegas" reality in the middle of a global pandemic. As the U.S. enacts measures to contend with the spread of the COVID-19 coronavirus, and people are advised to self-isolate and distance themselves from others, all professional and collegiate sports in the country have suspended play. And in Las Vegas, the beating heart of the sports gambling industry, Nevada Governor Steve Sisolak ordered a monthly ban on all casinos and non-essential businesses.

Colucci speculated this lost weekend could cost the sportsbook industry $140 million. This suspension comes just as legalized sports gambling has exploded across the country.  Since the Supreme Court overturned the Professional and Amateur Sports Protection Act of 1992 in May 2018, 20 states and Washington D.C. now offer legal wagering. Last year, the American Gaming Association estimated $150 billion is gambled around the world per year in legal and illegal settings.

The economic impact goes well beyond gaming. As of Friday, nearly all 95% of the country's commercial casinos have shuttered their doors, in addition to 82% of tribal casinos, hitting 98% of the casino workforce (over 600,000 employees), $74 billion in total annual wages, and up to $43.5 billion in damage to the U.S. economy if the casinos remain closed for the next eight weeks, according to the American Gaming Association.

Sports gambling sites hit by league cancellations

Sportsbooks are getting creative in an attempt to make up for lost revenue.

"If you can bet on it and we can book it, somebody is going to bet on it," Colucci said.

In the short window between the mass shutdown of most sports leagues and the gubernatorial mandate for casinos to cease operations, the Rampart tried to adapt. Colucci says they tried to book the KHL Russian Hockey League, Turkish and Mexican Soccer Leagues, and the usual live and virtual horse racing. They even looked at expanding the propositions bets around Tom Brady and where his first snap could take place.

Sportsbooks off the Las Vegas strip have ventured into even more obscure oddsmaking territory.

Bovada, a sportsbook company based in Costa Rica, began taking bets on the maximum temperatures in various cities around the country. Days before, a viral tweet brought on some momentary fame for a new platform designed for just that, When the app launched in mid-February, its site drew roughly 10,000 visitors per week.

Even when major sports do return, we think we'll still be standing because let's face it, people are more likely to guess their local temperature correctly than a Browns football game coming this fall.
Jesse Rowe co-founder

This past week, thanks to the absence of American sports, the site ballooned to more than 100,000 visitors, according to co-founder Jesse Rowe. Even though the app is currently in a private beta, Rowe hopes it will be more than just a way to scratch a gambler's itch during this drought and could survive in the greater gambling ecosystem.

"People are definitely looking to replace the hobby of sports gambling and we're trying to be their solution," Rowe said. "Even when major sports do return, we think we'll still be standing because let's face it, people are more likely to guess their local temperature correctly than a Browns football game coming this fall."

Simulated gambling reality

As conventional options continue to dwindle, popular sports betting site FanDuel introduced new games to its daily fantasy site based on events such as the "Survivor" reality TV series and the Democratic Party presidential debate, the latter drawing more than 55,000 entrants.

FanDuel rival DraftKings has been doing similar things, with a free prize pool on last weekend's debate that included wagers on "which candidate will bring up the coronavirus first?" and "over/under how many tweets will Trump post during the debate?"  DraftKings also has been focusing on free-to-play pools for TV shows, such as Top Chef, Jeopardy, and Curb Your Enthusiasm, along with paid pools like Aussie Rules Football and Australian Rugby.

Interest in eSports daily fantasy has also spiked since March 13 on DraftKings. The company says growth around League of Legends daily fantasy has been considerable, with unique paid actives up 1,050% and entry fees increasing by 707% week over week.

 In FanDuel's NBA Sim Sports, the book is attempting to fill the void of live daily fantasy statistics with randomly generated points drawn from NBA games played during the 2019-20 season.

Simulation in the gambling sphere is not uncommon. After all, virtual horse racing is found in many casinos. And without real sports to play, interest in simulated games has increased. WhatIfSports v.p. of technology Scott Eble says his company received a 25% sales bump over the previous week, and they are now producing March Madness simulations for the New York Post, for editorial use only.

Gambling on simulated versions of canceled events is unprecedented and currently unregulated by the Nevada Gaming Commission and there is the opportunity for influenced results. WhatIfSports has done predictions for major sporting events and for fantasy sports, but has not yet packaged any service for gambling. 

Eble said he hasn't looked too deeply into the subject, but says the idea of betting on simulated games "seems like a thorny one."

"I don't have a strong feel for how gambling will impact simulated sports. I know there's always a hunger from the gambling community for information that might expose overvalued or undervalued targets, so that's an area that simulation can impact," he said.

For now, sportsbooks have to salvage any revenue they can. According to Colucci, that problem could be somewhat offset with reforms to mobile gaming regulations. Casino operations are not allowed to be conducted in a work-from-home setting and accountants are required to close out and audit the books on a nightly basis. Accepting bets in mobile would at least allow some money to come in even with limited offerings.

"You can't just cripple businesses and shut things down when you're in the gambling business for 30 days," Colucci said. "These casinos are going to get hurt, especially the major corporations."

The big casino companies are already hurting, including MGM Resorts International, Caesars Entertainment and Wynn Resorts.

There's no timeline as to when sports will resume play or any promise that things will return to normal. But Colucci is confident the interest in sports gambling is so strong, the industry will bounce back.

Some Wall Street analysts have begun to upgrade casino stocks, such as Las Vegas Sands, based on strength of balance sheet and likelihood of long-term recovery, even if the short-term uncertainty remains. And the casino sector ended a volatile week on Wall Street with at least one winning day on Friday, with stocks like MGM up near-20%.

"I think we'll come back stronger than ever, to be honest with you," Colucci said. "It's just a matter of when. Us as bookmakers, we always are here to book what people want to bet. This is what Las Vegas is built on."