You are probably familiar with sports gambling–betting on the outcome of a sporting event such as the Super Bowl. But have you ever heard of someone gambling on a video game simulation of a sports game? During the COVID-19 pandemic, that is exactly what many gamblers started doing.
The industry for sports gambling in the US has skyrocketed since becoming legalized, valued at over $85 billion in 2019. However, when many sports leagues shut down during the COVID-19 pandemic, sportsbooks were suddenly left with the prospect of swiftly introducing new betting options or losing massive amounts of revenue. Thus, sportsbooks began to offer simulated sports games, or “SIM” sports games, including Madden NFL 20 and NBA 2K20. SIM sports betting offered an enticing alternative for gamblers who still wanted to stay connected to the action. The offering of SIM sports was largely viewed as a desperate attempt to retain customers until real sports came back. However, SIM games became so popular and convenient for sportsbooks that many companies decided to keep offering them even after sports leagues resumed playing. Sports simulations of games such as Madden NFL and NBA 2K have the potential to be an option for sports gamblers for years to come.
But what exactly are SIM sports games? They are simulations of a game between two teams, using popularly available consumer video game systems such as an Xbox or Playstation device and the relevant game software. To host them, a gambling company broadcasts the game on a streaming service (usually Twitch) and has it run as a simulation instead of having anyone physically playing. The game settings are disclosed beforehand and are typically configured at the default settings.
There is a wide array of sports simulations available, such as Madden NFL, NBA 2K, FIFA, NHL, and MLB The Show. This variety allows the sportsbooks to cover all the primary and most popular sports. Like real sports, people can socialize and even compete with one another when gambling on SIM games. Furthermore, the outcome of SIM sports games is not pure chance; the games are programmed to reflect the attributes of the players and their teams, so betting on SIM games requires the same knowledge and analytics as betting on real sports. Bettors on SIM games find them realistic, and the experience is convincing enough to conclude that skill is involved in betting on SIM games, not pure luck. An article in Bleacher Report concluded that over a three-year period, the accuracy rate of Madden NFL simulations is 72%, and that the simulations “are able to take into consideration player tendencies, injuries, weather, and even the crowd.”
The greatest advantage of SIM sports games is that simulated games can be broadcasted at any time, day of the week, or season, unlike real sports. With the return of real sports, SIM games can be deliberately scheduled for times when real sports are not offered. For example, Madden NFL simulations can be offered every day of the week, not just Sundays when the vast majority of NFL games are played. This allows SIM sports and real sports to complement each other rather than compete against one another.
Anecdotal research suggests that SIM sports betting has exploded among college and even high school kids, who have grown up online and immersed in video games. Researchers estimate that 75% of college kids have gambled and 67% have bet on sports in the past year. Many college students have access to money and/or disposable income and may have impulsive behavioral patterns, leading them to gamble large amounts of money in short periods of time. Finally, only 22% of colleges and universities have a formal policy on gambling, which means most college students are allowed to gamble.
The most significant hurdle to broader participation in SIM sports betting is undoubtedly the perception that the games are somehow fixed. Consumers have brought up suspicions of pre-recorded games and shady settings. To overcome this objection, sports betting operators should outsource the hosting of SIM games to a trusted third-party entity, so gamblers will have no reason to distrust the event’s legitimacy. Removing this concern should massively increase the adoption of SIM sports betting, particularly among the younger generation that already experiences video games as an extension of real life.