Legal sports betting has taken the US by storm since the overturning of the Professional and Amateur Sports Protection Act (PASPA) in May 2018.
49 months since the federal betting ban ended
Total sportsbook revenue has now passed the $10bn mark for the 49 months since the federal betting ban ended. The milestone moment was confirmed on Tuesday following the release of the latest sports betting revenue results in Pennsylvania and Michigan.
US sportsbooks have generated handle of around $141bn during the same period, which means that sportsbook revenue represents around 7.1% of handle. States have benefitted from $1.5bn in sports betting-related tax revenue, suggesting an effective combined tax rax rate of 15.1%.
Certain states driving the figures
New Jersey currently leads the way when it comes to betting handle and revenue totals, sitting at $28.56bn and $1.9bn, respectively. Thanks to its relatively high 36% tax rate, Pennsylvania has garnered the most tax revenue from sports betting, accumulating $270m to date.
However, New York has rapidly risen to prominence since its online sports betting market went live in January. Despite having only six months’ worth of betting results, it is fifth overall in the country for handle and revenue. It’s fair to say that passing the $10bn mark so quickly wouldn’t have been possible without the Empire State.
More room for growth
There is still plenty of scope for growth in the US sports betting market. The three most-populated states in the country still do not have sportsbooks up and running. Numerous attempts to introduce the activity in California have proven unsuccessful, with various parties now trying to get a public vote on the issue.
Florida briefly had online sportsbooks in November
Due to its conservative nature, Texas has not seen any realistic attempts to legalize sports betting. Meanwhile, Florida briefly had online sportsbooks in November before they had to close due to the state-tribal gaming compact being deemed illegal by a judge.
A lot of stakeholders in the sector are closely watching if states will alter their sports betting tax structures. Certain states offer promotional deductions on taxes, but some are now backtracking on this approach. Colorado is the first state to have removed the ability for operators to get promotional deductions.