States Compete for Sports Betting Pie

For more than two decades, Americans have illegally wagered billions of dollars through offshore accounts on sports events held in the US. In the process, governments across the nation have lost opportunities to rake in tens of millions of dollars in tax revenues each year. In May of 2018, the sports betting landscape changed in America. 

After many challenges throughout the years, the US Supreme Court finally determined that the 1992 Professional and Amateur Sports Protection Act was unconstitutional and the decision whether or not to allow citizens to legally bet on sports would be remanded to the individual states. 

With an estimated $150 billion in sports betting revenues on the line, a number of states immediately seized the opportunity to allow its citizens the opportunity to bet on sports through land-based ventures. In some cases, online sports betting has also been legalized in states like Pennsylvania and New Jersey. Aside from those two states, the others states already in line to start collecting taxes from sports betting revenues are Delaware, Mississippi, West Virginia, Rhode Island and New Mexico. Most these states have already legalized online casino gambling, making online sports betting just a vote or two away. 

To get an idea of what's really at stake, it's noteworthy that New Jersey Treasurer reported sports bettors wagered $330 million in November, which generated approximately $21.2 million in profits for the casinos and other betting venues and $2.45 million in tax revenues for the state. 

Based on the reality of these numbers, there's as many as 20 other states moving rapidly towards legalizing sports gambling for its residents. That list includes Arkansas, California, Connecticut, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, New York, Ohio, Oklahoma, Oregon, South Carolina, Tennessee and Virginia. 

It will be interesting to see what happens when one state passes the necessary sports betting legislation and neighboring states are forced to respond or risk watching potential tax revenues cross state lines. A state like New York is already seeing steady traffic heading across connecting waterways and bridges into New Jersey. 

There's also a possibility sports betting revenues will detract from other gambling revenue sources like horse racing, casino gambling and lotteries. If that notion would actually become a reality, the net result to a particular state might be negligible. With that said, it's hard to imagine that $150 billion in annual illegal bets coming to America won't have a positive impact on the state coffers across the country.