An unexpected surge in betting on the Summer Olympics is predicted following the legalization of gambling in the US.

• The first Summer Olympics in Paris will occur since gambling became legal in the U.S.
• In anticipation of the upcoming slow season for sports gambling in the U.S., market leaders FanDuel and DraftKings are preparing for increased betting on games.
• The largest volume of betting is predicted for basketball, soccer, and tennis events. However, the sports that users can wager on will vary based on their location.

Sportsbooks and daily fantasy operators are preparing for a Summer Olympics bump.

The upcoming games in Paris, scheduled to begin on July 26, will mark the first time legal gambling has been widespread in the U.S. since the games took place. The gaming industry anticipates a rise in wagering from the previous Summer Games in Tokyo, particularly for sports such as men's and women's basketball, soccer, and tennis.

Gambling.com Group's North America executive vice president, Max Bichsel, stated that for decades, the Olympics and gambling have been distant from each other. However, this year, they will come together.

The Olympic Games provide an opportunity for sportsbooks during the offseasons of high-volume betting leagues, but it is uncertain whether they will increase gambling operators' profits.

Smaller players may experience a more muted effect than giants FanDuel and DraftKings, which together hold about 80% of the U.S. online gambling market share.

"According to Jordan Bender, a senior equity analyst at Citizens JMP, the impact of the new policy on companies like or FanDuel will be relatively minor from an annual perspective. While it is positive, it will not have a significant impact and will largely depend on viewership."

The Olympics are unlikely to significantly impact FanDuel's sportsbook business, according to a representative of the company, which is owned by . DraftKings did not respond to a request for comment.

The surge in Olympics gambling highlights the recent growth of the market.

Gambling growth

The number of states that allow sports wagering has significantly increased since the last Summer Olympics, with many of them now permitting mobile and online betting.

The Supreme Court ruling that legalized betting in the U.S. was followed by the Tokyo Olympics, which took place just a few years later. In 2021, 97 million American adults were able to place a bet, while this year, 164 million American adults will be able to wager, according to the American Gaming Association.

""Incremental events are helping sports bettors find new opportunities to bet on, and hard-core gamblers are still making a lot of money on the NFL, NBA, and NHL," Bender said."

The Olympics may not experience the same betting surge as other sports in the U.S. due to state regulations limiting betting on many events and only allowing wagers on medal competitions.

The Olympics in the U.S. have experienced a decline in viewership recently, mainly because of the challenging time difference in Tokyo and Beijing, as well as the lack of spectators due to the pandemic.

This year, U.S. bettors will encounter a time zone challenge, as Paris's six-hour time difference from Eastern Time is less daunting than Tokyo's 13-hour time difference in 2021. However, prime-time events won't be live-streamed this year.

The Olympics will be streaming on Peacock for the first time, while prime-time replays will air on NBC.

Sportsbooks will be keen to see if that access improves betting interest.

Prepping for a summer surge

The Olympics are viewed as a chance to boost engagement and gambling during the typically sluggish summer months by many in the industry.

The two weeks of competition in Paris are beneficial for betting operators as they occur during the offseason of many U.S. sports leagues, including the NFL, NBA, and NHL.

The Olympics taking place in the summer could also reduce competition for viewers.

Brandon Friedman, vice president of operations at PrizePicks, stated that the company offers Olympic events in Tokyo and Beijing but learned that users prefer summer competitions.

"We are expanding our offerings for our members in preparation for the Paris 2024 Olympics," Friedman stated.

The stunning Paris scenery and the opportunity for U.S. viewers to watch the competitions live during the daytime are predicted to boost engagement.

The Eiffel Tower and Equestrian in the Gardens at Versailles will undoubtedly be the most spectacular venues in recent years, according to Bichsel.

The Summer Olympics will feature many popular sports, including basketball, tennis, and soccer, which are expected to be the top sports for betting, according to many operators, including FanDuel and BetRivers. Additionally, the recent increase in the popularity of women's sports is likely to continue in the Olympics.

FanDuel's betting handle at the Tokyo Olympics was mostly made up of basketball wagers, and the company anticipates that basketball will continue to be a major focus this year, according to a representative.

Betting on the Olympics will be influenced by patriotism.

Rush Street's BetRivers sportsbook head, Tim Whitehead, stated that patriotism is the top priority in the Olympics, and bettors are always eager to support their country's athletes, regardless of the event.

That may spill into betting on other countries, too.

"In the U.S., there is a diverse range of allegiances, with individuals supporting their country as well as their heritage in countries such as Italy and Korea, Croatia, and Brazil. This diversity in allegiances can affect sportsbooks' responses to international games, with some responding differently depending on the states and demographics. For instance, if an Eastern European country or Italy is playing, there may be an increase in bet volume from New York and New Jersey."

— CNBC's Jessica Golden contributed to this article.

Disclosure: Comcast's NBCUniversal is the parent company of CNBC.