March Madness attracts a wide range of sports bettors, with further growth in the category expected this year. Source: Noam Galai/noamgalai.com/Moment via Getty Images.

When it comes to US sports betting, March Madness is the biggest event of the year.

The American Gaming Association (AGA) estimates that $2.72 billion could be bet legally with US sportsbooks on the 2024 NCAA men's and women's Division 1 basketball tournaments. By comparison, the association estimates about half that amount, or $1.4 billion, was spent on legal sports bets around the Super Bowl. March Madness accounts for about 2% of all legal sports betting in this country, according to AGA Vice President of Research David Forman. The event attracts a broad base of bettors that includes casual fans, basketball aficionados, alumni from participating schools, and those with local and regional interests.

"People call in sick to work, play hooky from school," Forman said of viewer interest in March Madness. "Friends gather at houses or bars and restaurants to watch the games."

A lot of action occurs during the first round of the tournament, which this year took place March 21–22. The first week is "when there are upsets, a lot of the fun happens," said Rohit Ponnaiya, a betting analyst at covers.com.

The AGA sees several factors driving betting throughout the rest of the tournament, including the recent legalization of sports betting in North Carolina and rising interest in the women's tournament.

Carolina on bettors' minds

North Carolina, the ninth most-populous US state, with 10.8 million residents, became the 30th state to open up mobile sports betting when eight sportsbooks went operational March 11. Despite being open to betting for just weeks, North Carolina is expected to be major player in sports betting this year.

"College basketball is huge with North Carolina and Duke," said Brad Senkiw, an analyst at covers.com. "There's also NC State and Wake Forest. A lot of the legacy and growth of college basketball is tied to the Atlantic Coast Conference, dating back to the 1950s."

Eilers & Krejcik Gaming Consulting and Market Research estimates the legal sports betting handle for March Madness in North Carolina this year will be just under $221 million, or 8.2% of the total US March Madness handle. This would put the state in fourth in terms of spend, behind No. 1 ranked New York's handle of $391.2 million, according to Eilers & Krejcik estimates.

The Spectrum Center in Charlotte was one of the venues that hosted first- and second-round men's March Madness games March 21 and 23. Visitors and residents alike have been inundated with messaging from the various sportsbooks on TV, digital, social, billboards and radio channels, according to Senkiw.

Entering the round of 16, North Carolina, Duke, North Carolina State and Clemson remained in contention on the men's side. North Carolina State, Duke and Notre Dame were still in contention in the women's tournament.

North Carolina legislation allows for up to 12 online sports betting operators and eight retail sportsbooks. The tax rate is 18%, with revenue earmarked for things like youth sports equipment and playing fields, gambling addiction and treatment programs, and support for athletic departments at 13 colleges in the state.

Eight online sportsbooks — including FanDuel Inc., DraftKings Inc., BetMGM LLC, Caesars, Fanatics Holdings Inc. and ESPN BET — began taking action in North Carolina on March 11. All told, 38 states and the District of Columbia now offer legal sports betting.

Prop bets

North Carolina is one of the more permissive states in terms of allowing a wide range of betting targets, Senkiw said, pointing to minor league and college baseball as well as prop bets on collegiate players.

Prop bets, short for proposition bets, are a type of side wager on parts of a game that can have nothing to do with the final score. For instance, prop bets can be made on whether a player misses a free throw or the number of rebounds corralled.

Eilers & Krejcik estimated that recent bans on prop bets involving NCAA players in Ohio and Maryland could cut sportsbook revenues in those states by 5% to 10%.

NCAA President Charlie Baker plans to reach out to states to ban proposition bets involving college athletes in the wake of incidents spanning a variety of sports. In addition to Ohio and Maryland, Vermont has prohibited collegiate prop bets.

New sportsbooks

Beyond the types of betting allowed, North Carolina is unique in another respect: ESPN BET and Fanatics are in its sports betting market. This is the first time both entities have been ready to enter a new betting state and vie for market share alongside other sportsbooks.

The ESPN BET app and site launched in November 2023 after ESPN struck a 10-year, $2 billion licensing, advertising and stock deal with PENN Entertainment Inc. in August 2023. Fanatics bought PointsBet USA last summer and has been securing sports betting authorization in various states.

"North Carolina represents a great opportunity. It's a big state and one of the homes of college basketball," said Mike Morrison, vice president of ESPN BET and ESPN Fantasy.

ESPN BET began its multichannel marketing strategy in North Carolina on March 1 with a pre-registration campaign that is continuing for several weeks. In addition to TV spots, a number of other tactics are in play: geo-targeted takeovers of ESPN digital platforms; multiple emails to ESPN's database; promotion across an array of radio stations, including ESPN affiliates; and launch messaging integrated into the studio shows "Get Up" and "First Take."

ESPN BET is also being promoted through its market access partner, the Quail Hollow Club.

The March Madness rollout follows ESPN BET and PENN's debut in mid-November 2023 with the pro and college football season. "There certainly has been some good timing," Morrison said. "We have a lot in development for the coming months."

Stations lift

Nexstar Media Group Inc. owns TV stations with solid ad sales in the two most populous markets in Carolina: WJYZ, the FOX (US) affiliate in Charlotte, and WNCN, the CBS (US) affiliate in Raleigh-Durham, according to S&P Global Market Intelligence Kagan research. It also owns the CBS affiliate WNCT in Greenville and FOX affiliate WGHP in Greensboro.

Sportsbooks began spending in the lead-up to North Carolina's March 11 online sports betting debut. A Nexstar spokesperson said all of its North Carolina stations have seen a bump in category revenue.

Nexstar's WSPA, its CBS affiliate in Spartanburg, SC, is also seeing a spending uptick from sportsbooks, despite the fact that sports betting is not yet legal in the state. South Carolina, the No. 1 women's college basketball team in the nation, came into March Madness undefeated this year.

Following the initial blitz, Nexstar anticipates that category spending will level off as bettors decide with which vendors to establish accounts.

However, strong allocations could continue for a while, given the start of the 2024 MLB season and the beginning of the NBA and NHL playoffs in mid-April.

Wagering on women's tournament

The women's March Madness tournament is gaining popularity and viewing, boosted by interest in all-time collegiate scoring leader Caitlin Clark and Southeastern Conference player of the year, Angel Reese.

The AGA's Forman said states do not break out the amount wagered on the men's and women's games separately. However, DraftKings and FanDuel reported significant year-over-year growth in their betting handles for the women's regular season, Forman said.

Still, the sports betting totals remain well below those seen around the men's tournament.

According to a covers.com survey of 2,500 online respondents who are bettors, 65% indicated that they plan on watching some of the women's March Madness. However, only 26% of those who plan to watch expect to bet on any of the games.

"Women's basketball is exploding, but it's still not getting up to speed with betting," covers.com's Ponnaiya said.

Ponnaiya also said there are fewer prop bets on the women's players than on the men's side. "There will be action on Caitlin Clark but not every player."