US Sports Betting Update – Beto O’Rourke supports legal sports betting in Texas
Gubernatorial candidate Beto O’Rourke has thrown his weight behind the push to legalize sports betting and casino gaming in Texas. The Democratic nominee said he would be “inclined to support” a legal industry for online gambling if he is elected governor. O’Rourke made the comments during a press conference in Dallas this week, arguing that it could help to address some of the challenges that Texas currently faces.
He added that Texas is currently losing billions of dollars in revenue, as residents place their bets in neighboring states and at offshore sites. “From listening to Texans across the state, it’s one, a very popular proposal, and two, it would also help us address some of the challenges we have in reducing inflation and property taxes in the state,” O’Rourke said. “So I think that warrants a very close look and it’s something I’m inclined to support.”
A Tall Order in Texas
Texas is the second largest state by population and GDP. It would become the largest online gambling jurisdiction in North America if it were to legalize sports betting and casino gaming. However, there are major obstacles. For starters, O’Rourke is the underdog in the gubernatorial race. Politics betting is not permitted in the United States, but Ladbrokes – a British sister site to BetMGM – makes incumbent Gov. Greg Abbott the -600 favorite to win this year’s election, while O’Rourke is out at +600.
Yet O’Rourke is a popular figure in Texas. The El Paso native was elected to the US House of Representatives in 2012 and he served until 2019. He sought the U.S. Senate seat held by Republican Ted Cruz in 2018, and he only lost by a margin of 2.6% in a campaign that drew national attention. O’Rourke gained more votes than any previous Democrat in a Texas midterm election. While he may struggle to displace Abbott this time around, he remains a powerful advocate for the legalization of online sports betting.
However, the Republicans still control the legislature, and the Texas Republican Party states: “We oppose and call for a veto of any budget that relies on expansion of legalized gambling as a method of finance.” Any change to the state’s constitution would need to be approved by two-thirds of lawmakers in the Senate and the House, making it very difficult. Texans can currently head over the border to Louisiana and Arkansas to place legal sports wagers, but many use the offshore sites that the American Gaming Association is campaigning against.
New York Surpasses $5bn in Handle
New York currently reigns supreme as the largest state for sports betting, as California and Texas do not have legal industries. In the week to April 10, New York’s online sportsbooks handled $335.8 million. FanDuel continues to lead the way, with a handle of $142 million, followed by DraftKings with $83.5 million, Caesars Sportsbook with $49.3 million and BetMGM with $36.3 million. That quartet accounts for almost 93% of New York’s sports betting industry, with the remaining four operators – BetRivers, PointsBet, WynnBET and Resorts Sportsbook – making up the other 7%.
New Yorkers have now wagered $5.33 billion on sports since online sportsbooks launched in the Empire State on January 8. FanDuel alone has handled $1.96 billion since that date. DraftKings has taken $1.3 billion, leaving it narrowly ahead of Caesars, which made a flying start but has since cooled off. Gov. Kathy Hochul praised sports betting’s success and said it will be “an economic engine for New York, driving significant funding to our schools, youth sports, and so much more.”
New Jersey Still Growing Despite New York Launch
The sports betting handle increased to $1.12 billion in neighboring New Jersey in March. It fell short of the record of $1.35 billion set in January, but it represents very strong year-on-year growth. New Jersey’s handle increased 24.6% compared to March 2021, suggesting that the long-anticipated arrival of online sports betting in New York has not notably dented New Jersey’s performance.
Revenue in March hit $66.4 million, and the state earned $8.2 million in taxes. As you would expect, March Madness was the main driver, as basketball accounted for more than 60% of the wagers placed in New Jersey last month. However, sportsbooks only held 1.5% of the bets placed on straight basketball bets. They made most of their revenue from parlays, holding 16.3% of the $221.1 million wagered. That accounted for $36.1 million in revenue, which is more than two-thirds of the total revenue for March.
Pennsylvania Tops $1bn in Revenue
Pennsylvania’s sports betting industry has now earned more than $1 billion in revenue since it launched back in November 2018. Only retail sports betting was permitted for the first six months, but the industry has been gathering pace since the first online sportsbooks went live in May 2019. Keystone State sportsbooks earned $30.4 million in taxable revenue from a handle of $715 million last month, pushing the total revenue since launch to $1.01 billion. Basketball also proved popular among bettors in Pennsylvania in March, as Villanova made it all the way to the Final Four of March Madness.
FanDuel remains the clear market leader in Pennsylvania, mirroring the situation in New York and New Jersey. Last month, it accounted for a 40% share of the handle and around half of the total revenue. DraftKings was a distant second, with a 24.7% market share, followed by BetMGM (11.8%) and Barstool (8.3%). Rush Street Interactive has two online sports betting brands in Pennsylvania – BetRivers and SugarHouse – and they combined for a 6.7% market share, leaving it well ahead of Parx and PointsBet, which each captured 2.2% of the handle.
In Pennsylvania, sportsbooks can deduct promotional spend before paying a 36.5% revenue tax. They reported a loss of $442,847 in February, but that swung to taxable revenue of $30.4 million in March. Total revenue was higher, but they spent $18.1 million on promos. FanDuel is still spending the most on promotions, but BetMGM is not far behind as it bids to claw share from rivals in the state.