Ever since May 2018, following the Supreme Court’s reversal of regulations on sports betting, allowing each state to decide whether to permit sports-related gambling, revenues have exploded. In the two year period after the ruling, more than $20 billion had been bet.
Revenues are set to explode across the nation following election day, which saw sports betting initiatives from a number of states on the ballot.
Maryland voted to legalize sports and event betting at certain facilities. The measure could bring in $7.3 million to $18.2 million in tax revenue in 2022, assuming a 20% tax rate. Revenue also depends on if online sports betting is allowed. The revenue would go to the state’s education fund.
Bloomberg reports that South Dakota backed a proposition that would allow legal sportsbooks in the region that’s home to its casinos as early as next year. The South Dakota Legislative Research Council says the Deadwood Indian reservation’s casinos generate more than $100 million a year in revenue. Meanwhile, the Deadwood Gaming Association says its casinos last year contributed $15.9 million in tax revenue. Localities, tourism promotion and the state general fund will share in the proceeds.
Meanwhile, Louisiana approved a proposition that cleared a hurdle to allow sports betting. Louisiana’s land-based, riverboat and racetrack casinos supported the effort. They argued Louisiana residents cross state lines to place bets in neighboring states like Mississippi and Arkansas. The law allows Louisiana to regain some of that tax revenue.
The developments across the three states will open up a roughly $537 million market, according to Morgan Stanley.
As of now, 25 states allow casino gambling, while 21 states and Washington, DC, allow sports betting.
In Tennessee, the state’s first four licensed sportsbooks – Action 24/7, BetMGM, DraftKings and FanDuel – launched online-only sports gambling on November 1. As the Tennessean writes, their program is unlike any other in the nation, making the Volunteer State the first to regulate online sportsbooks directly, without the framework of casinos or possession of a retail gambling license as a precondition to operate a sportsbook online.
Action Network reports that legislation is in the works for both Massachusetts and Michigan as well. Though the former isn’t likely to see a whole lot of action on legislation until 2021, Michiganders could be making wagers before this year’s end. A bill drafted in 2019 allows 26 total online sportsbooks, one to each of the commercial and tribal casinos. Michigan is expected to generate some of the highest revenue totals among the roughly two-dozen states with legal wagering when it goes online in the coming months.
Many cash-strapped states recovering from massive spending during the COVID lockdown may expedite plans to legalize sport betting to begin collecting a share via taxes and fees. Currently, the sports gambling revenues paid to states are predicted to surpass the $800 million mark this year up from the $249 million recorded in 2017.
Currently, strongest sports betting market in America is New Jersey, setting a new record during September and smashing its previous all-time high. The sports betting handle totaled $748.6 million, an increase of more than $80 million (or 12%) from its August total. New Jersey’s relaxed regulatory approach has been key to the market’s success, allowing a large number of mobile sportsbooks to operate in the state so visitors of the state run into little trouble when trying to place bets.
Legal Sports Report notes that New Jersey’s record handles are actually an underperformance, relative to where hauls would be if it weren’t for the outbreak of COVID-19 hampering the college football schedule and many potential bettors’ finances. Looking at last year’s results, there’s a chance 2020 handle would have approached or topped $800 million in handle with more college football.
Per US Betting Report data, September was a strong month for sports betting across a number of other states as well:
Indiana posted a sports betting handle of $207.45 million during September, which was an increase of more than 22%. Indiana has become the leader in the Midwest portion of the United States.
West Virginia sports betting handle totaled $76.9 million during September, a 90% increase from August. Iowa saw $72.4 million in handle in September, which was an increase of almost 44%.
Illinois’ data lags many states by a month, but their August numbers show an impressive $140 million handle. That was a 166.7% jump from the $52.5 million brought in during July. The state was expected to see a huge increase month-over-month, but the jump was much larger than expected. Mobile wagering made up almost 89% of the total sports betting handle in August.
Back in September, MRP covered Barstool Sportsbook’s launch in Pennsylvania, amid a meteoric rise in the popularity of their social media presence. It’s still early days for the company, but so far the Barstool Sportsbook app has exceeded almost every internal goal its owner, Penn National Gaming, set for it, according to Penn’s CEO, Jay Snowden.
The app has 61,000 downloads in Pennsylvania through October 24, following its record debut on the app store that saw 35,000 downloads in its first weekend on the market last September. “We plan on being live in every state where we operate and where sports betting and online casino is legal by the end of 2021,” Snowden said on the company’s third-quarter earnings call.
The launch of the Roundhill Sports Betting & iGaming ETF (BETZ), which marks the first exchange fund dedicated to the fast-growing sports wagering and internet casino markets, is an innovative way for investors to play the boom in sports betting. The fund, launched in June follows the Roundhill Sports Betting & iGaming Index.