March Madness Contests Will Prove Major Draw During Recession

One of the biggest betting periods of the year is about to get underway with the start of 2009 March Madness.  For many of the online gambling sites, the lure will be March Madness contests, many of which promise $500,000 and up payouts.  With the U.S. in the midst of an economic recession, these March Madness contests are likely to reel more folks in than ever before.

Nearly all the contests begin March 19, the official start of March Madness.  The vast majority of entrees into these contests occur between Selection Sunday (March 15 thru the 18^th, though some contests are still open during the morning hours of March 19). 

The SBG Global always ranks among the most popular.  It's offering is a $500,000 grand prize.

"One has to be very careful when joining these types of contests since not all online sportsbooks are created equally," warns Payton O'Brien, Senior Editor of the Gambling911.com website.  "SBG Global is among the biggest and most established out there and it's not a problem for a company of this size and success to pay out a half million dollars.  But I can promise you, there are online sportsbooks out there that don't even have $100,000 in the bank to pay out let alone $500,000."

Of course, that point might be moot in the whole scheme of things.  The typical 2009 March Madness Contest will ask an individual to predict every single bracket with precision accuracy.  Make no mistake about it, some have come close to winning the grand prize....just not close enough to get all the teams correct.

"These contests are only available to customers of SBG Global, which means you will need to sign up with the site.  It doesn't necessarily mean you have to start betting, but most people do end up placing at least a couple of March Madness bets, regardless of how small."

Somewhere in the fine print Gambling911.com suspects there will be a notation requiring some minimum amount of betting action in the event an individual manages to actually win the contest, though at press time the "rules and stipulations" were not immediately available at SBG Global.

"Companies like SBG Global are banking on March Madness contest entrants being potential gamblers," said O'Brien.  "So whether these folks open up with real money for March Madness doesn't necessarily matter.  The vast majority will start betting at some point over the coming year and it's much easier to do so in an establishment where they've already joined."

The problem with that scenario is the wait for an actual cash bet might be longer than in past year as long as the current recession holds up.

The online bookmakers are already forecasting lower liquidity among bettors for next football season (September through January).  This equates to smaller bet sizes and ultimately a slightly lower revenue stream.

"March Madness provides a means of offsetting this forecast," explains O'Brien.  "The idea is to greatly increase the number of signups in hopes that these new customers will fill the void left from the decrease in betting from already existing customers."