This Super Bowl, where do states stand on sports betting?

The state of U.S. sports wagering took a sharp turn in May 2018, when the Supreme Court struck down a federal law that banned sports betting in most states.

Posted Updated

Samantha Putterman
, PolitiFact reporter

Sports betting is big business in the United States, and the Super Bowl is, well, the Super Bowl of sports gambling.

Ahead of the big game between the San Francisco 49ers and the Kansas City Chiefs, we wanted to check in on the state of play: How does each state regulate the sports betting industry? And how much revenue does it really bring in?

The state of U.S. sports wagering took a sharp turn in May 2018, when the Supreme Court struck down a federal law that banned sports betting in most states.

Since the ruling, legal sports wagering has increased by billions of dollars.

The expansion of the legal sports betting market doesn’t necessarily mean the end of illegal sports gambling, though.

Industry analysts say the legal market will likely create a new class of sports betting customers who want to engage more intensely with their teams. While a migration from the illegal market is still expected, it may be hard to pull some established bettors away from offshore and illegal betting websites.

The state of sports betting, per state

A burst of sports betting-related bills in state legislatures followed the 2018 court ruling.

In May 2018, sports betting was only legal in Nevada. Twenty months later, it’s legal in 20 states and Washington, D.C., said Casey Clark, senior vice president of strategic communications for the American Gaming Association, which lobbies in support of the industry.

"We’ve seen a really remarkable growth that I don’t think is comparable in any other industry," Clark said. "That growth is exceptional."

The states that haven’t attempted to legalize sports betting are the exception. As many as 40 states have introduced bills to legalize sports betting in the aftermath of the Supreme Court decision, said Daniel Wallach, a lawyer and co-founder of the Sports Wagering and Integrity Program at the University of New Hampshire.

"A number of states have passed laws, but haven’t formally implemented or launched everything yet," Wallach said. "But just about every state has it on their radar."

As sports betting legislation is debated across the country, multiple media and sports betting organizations are tracking developments.

How and where people can place bets varies by state, with some states allowing people to bet both in-person and online, while others restrict it to just one method.

For instance, Idaho and Wisconsin currently have no sports betting legislation on the table, while Indiana and Pennsylvania already allow both in-person and online betting.

Wallach said the traditional betting locations of casinos and racetracks may eventually become a thing of the past, as some states consider expanding sports wagering to other kinds of sites.

In addition to state-licensed facilities, for example, Washington, D.C., has opened up the opportunity for betting in bars, restaurants and sports venues. Other states like Illinois and Montana also have bar-betting in their sights.

How is legalization affecting the illegal sports betting market?

The American Gaming Association estimates that Americans wager approximately $150 billion in illegal sports bets every year. While this number and others have been challenged, some of the lowest approximations still tout figures upwards of $60 billion. And all of these are just best guesses, anyway, as offshore bookkeepers aren’t reporting any taxes.

"As more states begin to legalize, particularly ones with a mobile-online component, that will lure customers away from offshore sites and illegal betting sites," Wallach said, "but it won’t eliminate the illegal market for a number of reasons."

Long-established offshore accounts, the lack of tax reporting and overall happiness with the experience is going to make it difficult to pull some people away, Wallach said. But there should be a fair migration from the illegal market, he said.

Clark agreed that new bettors will flood the legal market, but he also expects plenty of established bettors to join in, too.

"Sports betting isn’t new, of course; people have been doing it forever," Clark said. "I think the best we will be able to do is be anecdotal in our observations, but we are already seeing a drastic decline in offshore illegal books in states that legalize."

How much revenue are states pulling in?

Only a handful of states are reporting sports wagering revenue. (More will come as new laws are implemented.)

According to sports betting website Legal Sports Report, numbers from June 2018 to Dec. 31, 2019, show that, of those states, New Jersey and Nevada brought in in $47.7 million and $32.8 million in revenues, respectively.

Experts estimate that 26 million Americans — 3 million more than 2019 — will wager a total of about $6.8 billion on this year’s Super Bowl match-up.

Copyright 2024 Politifact. All rights reserved.