Sports Betting Revenue By State Four Years After Legalization

Written by:
Gilbert Horowitz
Published on:
Dec/19/2022

It's been four years since sports gambling outside of Nevada was legalized in the United States.  In the Silver State there was an abundance of retail sports books and limited mobile that requires registration on-site pre-2018 and they lead the way just two years ago (as seen below - 2020), but New Jersey was already nipping at their heels.  A host of even more heavily populated states like New York and soon Ohio continue to join the fray.  New York had previously only offered land-based sports gambling.

This all came about thanks to the U.S. Supreme Court throwing overturning the Professional and Amateur Sports Protection Act of 1992 (PASPA) and thus ushering in an era of unbridled sports gambling in the States.  It was supposed to be regulated - and we guess it is - but the industry more resembles the pre-dawn department store openings on Black Friday.

To date, only a handful of state-regulated gambling websites allow for anything beyond sports betting.  This remains a head scratcher considering how popular the online casino gambling market is in other jurisdictions like those throughout Europe.  Online casinos have long been offered to Americans courtesy of sites based out of Costa Rica, Curacao and Antigua.

Even with a more scrutinizing regulatory process in both Massachusetts and Ohio to close out 2022, neither of those states will be considering casino gaming.  It's all about sports.

2020

 

None of the other states even come close to Nevada and New Jersey two years ago.  NJ came into the pictured determined to do everything right and, for some time, were the only tue full service game in town (mobile, solid retail outlets, casinos and poker).  Gambling911.com even got the opportunity to take a tour of the newly built FanDuel sportsbook at the Meadowlands, before it was even fully completed.

Colorado had just gotten underway with its legalized sports betting and continues to see success, albeit one of the brands just closed shop.  A total of seventeen were looking to offer wagering to those 21 and older but that market simply does not look feasible for so much competition.

From Axios at the time:

Looking ahead: Former American Gaming Association executive Sara Slane, who now advises companies in the space, lays out five key trends to watch moving forward. 

The line between sports and casinos will blur as the two industries fight to capture discretionary dollars. Think: The sportsbook inside Washington, D.C.'s Capital One Arena. 

Mobile and retail operators presenting a unified front. "Expect to see a shared wallet for online gaming tied back to retail, more cashless payment acceptance on the casino floor, and rewards and comps for online play." 

Optimizing the "watch and bet" experience. Live lines must be set quickly and internet connections can't lag. 

Tech companies will enjoy rapid growth. Even (especially?) during a pandemic, "online sports betting presents an opportunity for innovation in a traditionally anemic industry." 

Gaming regulations will evolve with the times. "Sports betting will move the regulatory process forward to meet consumer demands." 

The bottom line: So much has changed in just two years, but in reality, it's only just begun. 

It sure has.  Since 2020, well over a dozen states have joined the pool of those offering sports betting in one fashion or another, some land-based only like Washington, Wisconsin and South Dakota. 

Now a look at last month's numbers (October 2022)

sports_betting_handle_by_state.png

 

It should come as little surprise that the 4th most populous state in the nation, New York, is blowing all others out of the water.  None of the three most populated states - California, Texas and Florida - offer any form of sports betting just yet.

New York's October number was around $1,500,000,000.

New Jersey, with a population half that of New York State, continues to generate the second most revenue.  It's much higher than what appears in the graph above as New Jersey is one of the few states that offers online casino games for real money.

Pennsylvania is still going strong but Gambling911.com believes they will be overtaken by neighboring Ohio in the coming year. The operating taxes in PA are brutal to say the least at 34%.

Ohio has a pretty aggressive plan to launch sports gambling in early 2023, probably January.  Sure they are late to the party but the activity will be available in pretty much every bar, restaurant, gas station, even Kroger's supermarkets.

Michigan is a bit of a surprise to us as they too offer real money online casino gaming.  This is typically used as an entry point for the sports wagering arm of websites (i.e. if you're already playing at the online casino, there's a good chance you'll want to place those World Cup bets).   Michigan's sports betting market we rank among the least restrictive in the nation.

Tennessee makes the cut even without any retail sportsbooks.  The Volunteer State offers mobile-only wagering.

- Gilbert Horowitz, Gambling911.com

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