The Rise of Legal Sports Betting in the United States
Ohio has emerged as a regional hotbed for the initial rounds of the men's NCAA basketball tournament this year, offering sports enthusiasts a novel opportunity. For the first time, fans in Ohio can legally place bets on the tournament's outcomes using a mobile app or through kiosks located in bars, restaurants, or grocery stores. This development in Ohio is part of a broader trend across the United States, where states like Kansas, Massachusetts, and Maryland have also rolled out online sports betting platforms since the last NCAA tournament.
Currently, a total of 33 states along with the District of Columbia have embraced sports wagering, marking a significant shift in the legal landscape of sports betting in the country. Ohio, in particular, has witnessed a substantial betting volume, with more than $1.1 billion wagered in the first month of sports betting operations. This activity has generated over $20 million in state tax revenue, almost tripling the projected amount for the first six months.
In response to this success, Ohio launched mobile betting options and retail locations simultaneously, showcasing a robust model for other states to potentially follow. Governor Mike DeWine of Ohio has even proposed doubling the tax rate on sports betting, highlighting the state's commitment to leveraging this new revenue stream effectively.
New York has seen a similar surge in sports betting enthusiasm. Having allowed in-person sports betting in 2019, the state experienced a significant boom with the introduction of mobile betting in January 2022. Online sports betting in New York has generated $661 million in tax revenue for education through February, underpinned by a large population and the presence of multiple professional sports teams that naturally stimulate interest in sports betting.
Arkansas offers another case study in the burgeoning sports betting market. The state commenced in-person sports betting at casinos in July 2019, with mobile sports betting gaining traction last year. The introduction of mobile betting dramatically increased the betting volume, with nearly $3 million wagered on this year's Super Bowl, more than three times the amount before mobile betting became available.
However, not all states have met their revenue expectations from sports betting. Montana and Connecticut, for example, received less sports betting tax revenue than projected. Despite these variances, legal sports betting has generated over $3 billion in state and federal taxes since the Supreme Court's ruling in 2018. Analysts suggest that sports betting is producing about three-quarters of what could be anticipated from a fully mature market.
The discourse surrounding sports betting has markedly evolved from questioning its viability to discussing optimal implementation strategies. States like Kentucky, Minnesota, Missouri, and Georgia are contemplating or have considered legislation related to sports betting, indicating potential expansion in the near future.
Yet, major players like California, Texas, and Florida currently do not offer online sports betting. In Florida, the Seminole Tribe had to discontinue its online sports betting app following a court injunction, while California voters turned down sports betting initiatives in the last November elections.
Officials and stakeholders are optimistic about the future of sports betting, underscored by comments from figures such as Jessica Franks, the communications director at the Ohio Casino Control Commission, who noted the unexpected magnitude of the market on day one. Similarly, State Sen. Joseph Addabbo Jr. highlighted the growing preference for mobile device betting. Scott Hardin, a spokesperson for the Arkansas Department of Finance and Administration, anticipates that March will set a new monthly record for sports betting in the state.
Casey Clark, the senior vice president at a leading association, summarized the shift in the dialogue around sports betting. "The debate about sports betting has transitioned from 'Is this something we should consider?' to 'How should we go about doing this in a way that best serves our constituencies?'" he said, encapsulating the current sentiment towards sports betting in the United States. This transition reflects a broader acceptance and embrace of sports betting as a legitimate and lucrative industry.