It's been eight months since the United States Supreme Court paved the way for legalized sports betting by ruling to strike down the Professional and Amateur Sports Protection Act.

In the following segment from Industry Focus: Consumer Goods, host Nick Sciple and Fool.com contributor Asit Sharma bring listeners up to date on the growth of sports betting and what we can expect in 2019. Watch this video to learn how casino operators and online daily fantasy sports companies are jumping into the sports betting arena.

A full transcript follows the video.

This video was recorded on Jan. 15, 2019.

Nick Sciple: As I mentioned, one of the biggest news items in 2018 surrounding gambling was what went on with sports betting. Back on May 14th, the Supreme Court overturned the Professional and Amateur Sports Protection Act. Basically, what that act had done was banned sports betting outside of Nevada, and I think there was one other state that was carved out that hadn't used their carve-out. That happened back in May. We've seen some states move to legalize, about nine states are currently legal. But there hasn't been quite as much movement as maybe some had hoped for. Part of that has to do with the way the legislative calendars line up with a lot of these states. Because that federal ban on sports betting through PASPA was lifted by the Supreme Court, we still have to have legalization come at the state level, and most state legislative calendars tend to wind down at the end of May. It takes a little bit of a process to work through the bill-making machinery. With state legislature starting to come back into session here at the end of January, beginning of February, we might see some movement on continued legalization.

To give you some context on the size of the sports betting market, $4.9 billion was bet at Las Vegas sportsbooks in 2017. Some estimates on the size of the illegal gambling market are as high as $150 billion, although, based on what I've seen, I think around $70 billion is probably more reasonable.

Asit, what are your thoughts on these early days of how sports betting has emerged and the regulatory environment we're looking at?

Asit Sharma: As we go forward, some of the states which traditionally have gambling operations have been the first to pass through their legislatures the mechanisms for gambling. Mississippi is one, which you'll be very familiar with, obviously. New Jersey very quickly moved in 2018 to allow sports betting.

One of the things I'm looking at is this possibility of a federal bill coming up. The Sports Wagering Market Integrity Act of 2018 was sponsored by Senators Orrin Hatch and Chuck Schumer. Of course, Senator Hatch retired in December, so the bill has to be reintroduced in Congress. What I've read is, many people in the industry don't think that the federal regulations are going to amount to much after the SCOTUS decision. But, two of the big online betting outfits, DraftKings and FanDuel, are certainly monitoring this very carefully. DraftKings is making preparations just in case. A recent filing shows that they have engaged two lobbying firms to "educate policymakers on issues related to fantasy sports and sports wagering." So, as far as the daily fantasy sports getting into this sports betting, they're already moving in. I think they'll work with influencing the policy debate if there is any. But to me, it seems that this is moving forward, and more states will adopt this year.

Sciple: Yeah, that seems to be the case. It's a battle that's going to continue to play out. Something to call out there is, Sheldon Adelson, the leader of Las Vegas Sands, which is another casino operator, he's also a heavy political donor and a heavy supporter of the coalition to stop internet gaming. He has a lobbying special interest organization there. It's going to be interesting to see the battle between the folks on his side of the debate wanting to put a wall around how large internet gaming can be, along with these new upstarts like you mentioned, DraftKings and FanDuel.

As we look to how sports betting has played out in this first year, our best data is really coming out of New Jersey. As you mentioned, they had some existing gaming operations. New Jersey was the force behind this Supreme Court case. The original name of this Supreme Court case was Christie vs. NCAA, Christie being Chris Christie, the governor of New Jersey at the time when that case was brought. So, New Jersey was really Johnny on the spot with bringing this online. Just in the first six months of sports wagering in New Jersey, we've seen $928 million of wagers placed. To give that some context, that's about half of what Nevada puts together, $1.8 billion, in the first six months. That's about half of the amount of sports bets placed in Nevada. Considering this is coming only six months, with infrastructure not being in place until after May, it really has ramped up in a very, very speedy fashion, and it looks like there could be some more upside.

You mentioned DraftKings and FanDuel. This is an important thing to call out. Of the amount of bets placed on sports in New Jersey, of the revenue collected, about two-thirds of that sports betting revenue has accrued to sportsbooks affiliated with DraftKings and FanDuel. These have been very influential players in driving traffic there. There are a few reasons behind that. Of course, they have an existing user base of folks who are comfortable putting money on the line to make decisions surrounding sports that are sports fans, and they already have an app in place.

Asit, what are your thoughts here so far on how DraftKings and FanDuel and these other online operators have been able to capture a larger share of the market than your existing legacy casino players?

Sharma: I think the brand familiarity that you mentioned is a big one. Both of these companies have loyal followings who've made deposits with the company, been able to withdraw money on their winnings. That's very important to the online wagerer, if I can use an antiquated term. This kind of familiarity with your sportsbook, the place where you go and place your bets, collect your winnings, and your trust in that, be a retailer, physical location, or online, is extremely important in the industry, as you can imagine. I think they've got this edge.

I want to call out a stat that you brought to my attention. This is amazing. More than 72% of money wagered on sports in New Jersey in November came via mobile and online platforms. Nick, I've got your numbers right here, $21.2 million in overall revenue, $14.4 million of that was online revenue vs. $6.8 million in retail. So, like we see with many other industries that we discuss, if you make it easy for someone to do something online, it doesn't matter what it is, people are going to come. It's very easy to move money, and it's one of the more compulsive industries. I usually talk about compulsive industries in terms of Starbucks and coffee, but this is that amplified many magnitudes. As you say, be responsible if you try out online wagering. Do it as a hobby.

One thing that I'm very interested in in the coming months and years, also, is what I call capabilities crossover. So far, Draft Kings, FanDuel, and a couple of smaller competitors don't have physical presences. We've seen since the SCOTUS ruling that FanDuel has opened a sportsbook in Meadowlands Racetrack in New Jersey, and DraftKings has opened one in Resorts Casino Hotel in New Jersey and also at Scarlet Pearl Casino Resort in Mississippi. As these companies decide that a physical presence will enhance their offerings, by the same token, some of the larger traditional casino players like MGM and Caesars are looking to partner up with smaller companies and also extend their own online capabilities and cross over the other way -- that is, to go from a capital-intensive economic structure to something that's capital-light. I think both of these types of wagering facilities are going to learn from each other. We'll see lots of partnering, we'll see lots of M&A.

I'm curious, your thoughts on how that will fold out?

Sciple: For me, at the end of the day, in the states where mobile wagering is legal, it's going to capture an outsized share of the market as we saw in New Jersey. The question I have on my mind is, how many states are going to legalize mobile and online betting? You're going to have concerns of, how do we verify the age of the gambler, do we really want everyone being able to place bets on sports anywhere in the world, or do we want to confine it to a smaller arena? In Mississippi, you have sports betting, for example, confined only to on-site locations. It's going to be interesting to see how the regulatory framework plays out from state to state. It's a little bit of a wait-and-see here. I do think in the states that allow online and mobile betting will probably have a quicker uptake on the amount wagered there.

I do think for sure what we're going to see is sports betting become a larger subset of how people consume sports. You're already seeing on ESPN, for example, Scott Van Pelt on his SportsCenter show has the "Bad Beats" segment that he'll do every night, and things like that. We're having that come into more of how sports are covered. Deloitte had some numbers out, I sent these out on our end-of-the-year show. Deloitte's expecting that sports betting will drive 40% of all TV watched by men ages 25 to 34 years old, which of course is a very important demographic particularly when it comes to sports. So, definitely can drive engagement there.

Asit Sharma has no position in any of the stocks mentioned. Nick Sciple owns shares of CZR. The Motley Fool owns shares of and recommends SBUX. The Motley Fool has a disclosure policy.