The Money Behind Golf Betting

Breaking down golf betting and a new company - LoopGolf.

Every Monday, I write a newsletter breaking down the business in golf. Welcome to the 28 new Perfect Putt members who have joined us since last Monday. Join 3,741 intelligent and curious golfers by subscribing below.

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Hey Golfers —

In 2018 — the U.S. Supreme Court ended the federal ban on sports betting, paving the way for states to legalize sports betting. There are now 30 states and Washington, DC, where a gambler can legally place a wager on sports.

But sports betting isn’t the only option to win money in the golf space. Daily Fantasy Sports providers like DraftKings and FanDuel have contests that award several millions of dollars during a major week — and hundreds of thousands of dollars during a non-major. There are 43 states where Daily Fantasy Sports is legal.

Here is the legal difference.

• Game of Chance — Sports Betting

• Game of Skill — Daily Fantasy Sports

Betting on sports has exploded in growth. In June of 2018, gamblers wagered $310 million per month. In October of 2021, gamblers wagered $7 billion per month.

New York currently sees the most action, even more than Nevada. The chart below is a fantastic graphic illustrating the growth of the industry.

(Photo Credit: Bloomberg)

The American Gaming Association reported wagers with sportsbooks reached $57.22 billion in handle (amount wagered) in 2021 — a jump of 165% over 2020. Revenue for sportsbooks hit $4.29 billion in 2021 — representing an increase of 177% versus 2020. The huge increases were primarily due to seven new states coming online.

Here is a look at the aggregate data broken down by state since 2018. Keep in mind — some states legalized sports betting at later dates.

(Data Credit: Legal Sports Report)

According to Golf Datatech — betting on professional golf is estimated to be in the $4.5 - $5 billion in handle range. For context, the NFL is estimated to be over $20 billion in handle. Golf represents about 8% of the total handle in the United States — fairly impressive.

DraftKings and FanDuel have essentially validated the golf betting market. Signing Bryson DeChambeau and Jordan Spieth, respectively, to multi-year exclusive partnerships. While the financial terms of each deal are unknown — we could expect the annual amount to be seven figures. According to Sportico — Jordan made around $30 million in endorsement money last year.

A fascinating item to consider? The recreational golf betting aspect.

While it is unknown how much money exchanges hands during a weekly round of golf — we can expect it to be a significant amount of money. Around 80% of golfers are likely to bet on their own golf game.

Let’s take a quick pivot.

I was inspired to write a golf-related betting piece by the guys at LoopGolf.

Writing Perfect Putt has led to incredible friendships and conversations in the golf space. I ‘ve spoken to Matt Rum and Thomas Reinholm — the Co-Founders of LoopGolf — a couple of times. Two things stood out.

• An advisor

• Their background

The most compelling item for me? Stephen Hammer.

Stephen is the CTO of IBM Sports — responsible for building and running the best app in sports — The Masters App. Stephen is an advisor to Matt and Thomas at LoopGolf.

Matt and Thomas spent five years working at Block — they were involved and had a front-row seat at the viral success of building CashApp.

If you bet on the golf course or bet on golf — you will be interested in LoopGolf.

LoopGolf is essentially Venmo or CashApp for golf — but better. As a digital scorecard and wallet — LoopGolf aims to solve three paint points.

• Setting up a game before your round

• The challenge with scoring a game

• Settling up post-round with your competitors

LoopGolf will have the ability to set the match up before you play. LoopGolf keeps real-time scoring in the app — where every competitor can see who is winning and how much. After you win your match — you will easily collect payment via the app.

LoopGolf is considered a Game of Skill — and will legally be available in 43 states — the same states that allow DraftKings and FanDuel Daily Fantasy Sports. Matt and Thomas aim to launch LoopGolf by August 1st — in over 30 states.

LoopGolf has me intrigued for two reasons.

• As a customer

• As an advocate for golf entrepreneurship

I’m a big fan of this idea — and can’t wait to download the app and use it with my buddies. We hardly carry cash, and it is always “I’ll Venmo you” after the round.

Matt and Thomas are attacking the 80% of recreational golfers that place a wager on their rounds. Sports betting is growing — golf is growing. The thesis of this idea makes sense, and I respect the entrepreneurs that financially risk everything to build a company. And I love seeing innovative entrepreneurship in the golf space.

If you are interested in getting notified when LoopGolf launches — sign up for their email list right here.

Have yourself a great Monday. Talk to you next week!

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