Sports Betting Revenues are Beating Expectations
July 15, 2019
In May 2018, the US Supreme Court ruled that the Professional and Amateur Sports Protection Act (PASPA) of 1992 was unconstitutional. By doing so, the right to determine the fate of sports gamblers was remanded down to the state legislatures.
Currently, there are 14 states that have already moved forward and passed legislation that legalizes sports gambling for its residents. Of the 14 states, 6 of them are already accepting sports bets and generating revenues through licensed bookmakers. In the immediate future, there's at least three other states that will start taking bets prior to the start of the 2019 NFL season.
From a recent annual survey offered by the American Gaming Association (AGA), the results of legalized sports betting operations in America have been nothing short of spectacular. As we look at the numbers, it’s important to remember that only four states (Nevada, Pennsylvania, Delaware and New Jersey) participated in generating the numbers mentioned in the survey.
For the fiscal year ended December 31, 2018, US gambling operations brought in $41.7 billion. That number includes gross revenues from 465 land-based casinos, which are located in 24 of the 50 states.
Sports betting gross revenues from the aforementioned four states came in at a robust $430.2 million. That's a tremendous 64% jump over the $261.3 million in revenue reported for 2017. Extrapolated over the entire year while also including potential revenues from bets on the 2018 Super Bowl and NBA playoffs, the annualized revenue from sports betting would likely have been somewhere around $700 million.
Over the past few years, experts have been estimating that US sports gamblers bet as much as $150 billion a year through illegal local options and offshore sports books. Based on the numbers we are seeing from 2018, it's plausible the experts were correct.
We can make that assertion based on the fact such a small portion of the population (8%) accounts for the $700 million, which took place in a very small segment of time.
At this point, each state should be looking closely at these numbers. The potential for raising additional tax revenues by doing nothing more than passing sports betting legislation is tremendous. If any state should decide to not go forward with said legislation, it's a good bet another state or country is going to be more than happy to claim those revenues for themselves.