Three years after the Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA), over half of US states now allow sports betting. In all, there are 28 states where wagering on sports events is legal.
Florida is the latest state to make sports betting legal, with Governor Ron DeSantis passing sports betting legislation on May 25.
Over $21 billion is now gambled on sports annually in the US, and that will only increase with another six states due to join the party later this year, and 14 currently with bills under consideration.
It was New Jersey that set the ball rolling. After a legal battle that had lasted six years, the supreme court ruled in favor of sports betting on May 14, 2018. Just one month later, NJ Governor Phil Murphy placed the first ever legal sports wagers in the Garden State’s history.
Murphy put $20 on Germany to win the soccer World Cup, and the same again on the New Jersey Devils to triumph in the Stanley Cup. Both bets lost.
No doubt this success has been instrumental in spurring on other states. Joe Asher, former CEO of William Hill US said, “We’ve always known that sports betting was wildly popular all across the country, it was just relegated to the black market outside Nevada…Now that people see it happening legally in other states, they want it in their own state.”
The majority of sports betting these days, is conducted on mobile devices. The Coronavirus pandemic has obviously boosted numbers on that front but as Covid restrictions are dialed back, the brick-and-mortar sportsbooks will also be able to benefit. That is good news for land-based casinos as their mobile sportsbooks are obliged to pay higher taxes.
Jane F. Bokunewicz is coordinator of the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at New Jersey’s Stockton University. She points out that, “A higher tax rate which provides revenue to the state and revenue shared with the sportsbook providers mean sportsbooks play a more supplemental rather than central role in overall gaming revenues.”
But, she says, Brick-and-mortar sportsbooks provide, “an exciting amenity, one more attraction for casino visitors that generates complementary non-gaming revenues, particularly from food and beverage services.”
By 2023, it is likely that 37 states will offer sports betting in one form or another—bringing total revenue up to as much as $30 billion. However, that is just the tip of the iceberg. According to The American Gaming Association (AGA), it is estimated that $150 billion is gambled annually in underground and offshore accounts.
AGA’s CEO, Bill Miller is confident that the gray market figure will fall as more states legalize sports betting. He remarked that, “We’re continuing to set monthly record handles, which suggests that people, once they’re made aware of legal markets, are more supportive of them.”
It is a pattern that is set to continue. The AGA website states that “It’s only a matter of time before all American states offer sports betting… The potential revenues are massive, and lawmakers can’t ignore the incredible tax revenues offered for much longer, especially in the wake of the pandemic.”