Stop me if you have heard this one before: two men walk into a bar to watch a game, they both have 5-leg parlays. $10 to win $1000. As the game goes on, the anticipation builds. One more assist. One more steal. 2 more buckets.

And Bang! It hits. Euphoria ensues – fist pumps, LFGs and another round – this time jumping into the top shelf liquor with all that extra coin in your pocket.

In the world of sports fandom, you’d be hard-pressed to walk into a social function nowadays, or even head over to the water cooler at work without hearing some mention of betting. And whether you engage or not, sports betting has taken the US by storm: from politics to media to advertisements to consumer spending and savings habits… all the way down to everyday banter. Terms traditionally earmarked for bettors like over/under and parlay and have now made it to the dinner table.

Now, before your Grandpa tries to put in his $0.02 on your next parlay, let’s take a step back and take a look at how things got to this point.

The origins of betting date back as far as history goes and like many lucrative industries, it has deep ties to corruption and crime. In 1949, Nevada became the first state to legalize sports betting (with a 10% federal tax on all wagers). The hefty tax, combined with strict regulation, led to even more underground betting through organized crime syndicates. In 1975, Nevada lowered the tax and saw the type of exponential growth early stage SaaS companies dream of:

Source: An Overview of the Economics of Sports Gambling and an Introduction to the Symposium

As public interest in gambling surged, many states began their push to legalize sports betting. New Jersey led the charge against the Supreme Court, eventually winning a challenge to reverse the Professional and Amateur Sports Protection Act (PAPSA) that federally restricted sports betting (both at casinos/sportsbooks and online) in all states outside of Nevada in May 2018 — officially putting this decision in the states hands.

Why would states want to legalize sports betting?

The adoption has been swift and fast. As it stands, 38 states and Washington, DC have legalized sports betting in some form, and Missouri is set to go live in December 2025:

Even with the public perception shift and normalcy of sports betting, there are still detractors. Notably, the two most populated states in the US — California and Texas, have not legalized betting, and #3 Florida has only granted casino licenses to local Native tribes, and a sole online license to Hard Rock. 

Why it Matters: The culture shift from needing a bookie to being just a few taps away from placing a bet certainly had been a major one. While fantasy sports added in a financial incentive (or bragging rights) to follow and root for players outside of your favorite/local team, sports betting has brought things to a whole new level. Once upon a time, fandom was rooted in loyalty and pride. For many now, it’s “who are we betting on tonight?”.

After major public pushback and scandals (RIP Pete Rose), professional sports leagues have embraced the inevitable, now ushering in sports betting with open arms… and hundreds of millions of marketing dollars. In the NFL, a recent study showed that gambling advertisements appeared every 2.8 minutes during some broadcasts, and a sports bet logo, reference or commercial represented ~20% of total airtime.

On a league basis, the NFL is king yet again, boasting partnerships with FanDuel, DraftKings and Caesars — all of which spend hundreds of millions of dollars to be an “official partner” of the NFL. The buck doesn’t stop there: the NFL makes money off of data licensing agreements to help set betting odds, and we are even seeing the second-order effect of the gambling movement with entertainment venues. As teams search for new revenue streams and boosts to the fan experience, in-venue betting lounges and operating sportsbooks adjacent to stadiums are sprouting up left and right. (Editors Note: We recommend DraftKings Sportsbook outside of Wrigley Field in Chicago).

The Big Picture: Sports betting is now entrenched into the world of both professional and collegiate sports. As the market matures, we will continue to see the landscape evolve and consolidate.

The far and away leaders so far (as of June 2025) are Fanduel and DraftKings. Combined, the two hold ⅔ of the overall sports betting market, with BetMGM, Caesars and ESPN Bet making up the vast remainder of your go to source for a wager. As the sports betting world “grew-up”, and made the business shift from growth at all costs to profitability, we saw a flurry of strategic partnerships (i.e. PENN Entertainment and ESPN), as well as a number of acquisitions in the space (i.e. Caesars Entertainment purchasing William Hill’s US operations for $4bn in 2021).

As normalized as sports betting now is, there are plenty of warning signs. According to the National Council on Problem Gambling (NCPG), ~2–3% of U.S. adults (6–9 million people) are estimated to have a gambling problem, and the average debt generated by a male gambling addict is between $55,000 and $90,000, while female gamblers average $15,000 in debt. The industry has also increasingly gamified — think bonus bets, push notifications and boosted odds. Combine those with the ease of access, and it makes sense that users bet more than they should, and try to chase losses in order to make it all back. Because of this, we are seeing a slew of legal cases against sports betting companies around ad restrictions, betting limits and more.

These issues don’t just sit at the retail level, as both professional and collegiate leagues have built stringent guardrails around betting practices and enforce harsh penalties for offenders. The NFL and NBA mandate training on their gambling policies and also partner with betting security companies like Genius Sports to help flag and track down insider bets (like Calvin Ridley & several Detroit Lions players and personnel).

Zoom In:

The sports betting boom has also driven change in adjacent industries. Fans have evolved accordingly — 27% of fans 18 or older have found new rooting interests because of gambling. One major trend has been the surge in prop betting. Using the Super Bowl as a proxy, look at the sheer number of prop bets (legally offered), and the jump since PASPA was reversed. The punchline? There’s no shortage of things to bet on nowadays, and users are taking advantage of it. (Editors Note: the o/u on reading this newsletter is set at 10.5 minutes)

The sports betting-adjacent boom doesn’t stop there though: 

By the Numbers:

Since PASPA was repealed in 2018, the U.S. has now seen nearly $494 billion of bets at legal sportsbooks. Sportsbook Review data as of May shows 2025 trending slightly down YoY; however, the industry skews football-heavy, with outsized spikes in betting handle during the heart of football season (September-November). 

Betting terms:

The Bottom Line:  While legal battles will always be a constant drag for gambling companies, look to see them strategically navigate these waters through consolidation and technical advancements. At the consumer level, it has never been easier to place a wager so you have some rooting interest while stuck at the in-laws Thanksgiving. For teams and leagues, they have been gifted another lucrative revenue stream through licensing, marketing and other associated partnership activation opportunities (i.e. sportsbooks around stadiums).

While sports betting companies at the surface seem like strict foot/user traffic businesses, the deeper value stems from their underlying data integration and utilization. How can sports betting companies leverage their customer habits in ways to make more money, while also not being predatory? How can the companies that power these sports books use their algorithms in industries other than gambling?

A mini investment memo on the most innovative sports tech companies

The Company: Genius Sports

The Business in a tweet: Genius Sports is a leading sports data and technology platform that sits at the intersection of sports, betting and media. Through an advanced product suite and top notch partnerships, Genius has grown into an industry leader as the back-end data that powers much of the digital sports world from a fans perspective today.

The 101: 

Fundraising Status: IPO’d in 2021 via SPAC merger with dMY Technology Group II

Business Model: 

Traction:

Deep Dive:

Pros:

Cons: 

Comparables:

📶The Signal (No Huddle’s Take): We think Genius Sports is a classic “pick-and-shovel” play in the sports betting world. It provides critical data and technology infrastructure that powers sportsbooks, leagues and media. Genius has shown through their partnerships and advancements that they will remain at the forefront of the betting landscape, and boasts steadily improving unit economics and financial health along the way. We are keeping a close eye on the NFL partnership, and look forward to seeing how Genius Sports is able to leverage that across other leagues and organizations.

No Huddle is for informational purposes only and is not financial or business advice. The content in this newsletter does not represent the opinions of any other person, business, entity, or sponsor.