Posted on: May 7, 2024, 10:51h.
Last updated on: May 7, 2024, 11:06h.
The 38 states and the District of Columbia where sports betting is legal and operational saw their respective tax benefits increase greatly last year.
According to an analysis compiled by LendingTree, an online lending marketplace and personal financial website, state taxes from sports betting and parimutuel wagering topped $2.479 billion last year. The nearly $2.5 billion represented a 34.7% increase from 2022 when the state tax benefit was about $1.84 billion.
“It’s not breaking news that sports betting is big, big business in this country. It’s practically impossible to watch any sporting event today — in person or otherwise — without being inundated with advertising for sports betting sites such as DraftKings and FanDuel,” a release from LendingTree explained.
It’s part of the mainstream of sports conversation today in ways it never has been. That big business means big money for the states in which it’s legal,” LendingTree’s Matt Schulz wrote.
There are 38 states and Washington, DC that have legal sports gambling either in person, online, or both. Five additional states have active sports betting legislation or ballot initiative undertakings in 2024.
New York Dominates
Among those 38 states, no state comes close to New York in terms of betting activity and taxes generated. Online sports betting in the Empire State began in January 2022 and has since led the state to become the dominant player in the US sports betting industry.
New York reaped almost $876 million in 2023 taxes from sports betting revenue. New York has the largest population of the commercial sports betting states, as California and Texas remain on the sidelines. New York also has one of the highest tax rates imposed on sportsbooks at 51%.
Pennsylvania, which is the next most populated sports betting state and levies a hefty 36% tax rate on sportsbook operators, collected the second most sports betting taxes at $176.6 million. Indiana was third at $175.4 million, Illinois was fourth at $161.4 million, and Ohio rounded out the top five at $136.3 million.
New Jersey, the state that led the legal challenge that reached the US Supreme Court, which in May 2018 ruled in favor of states possessing the right to dictate whether sports gambling is legal within their boundaries, was sixth at $111 million.
The almost $2.5 billion in state tax receipts are in addition to what the federal government collected from the excise tax it levies on each wager. The feds receive 0.25% of every bet made.
Sports Betting Embraced
Along with tallying state sports betting taxes from regulatory reports, LendingTree polled over 2,000 US consumers aged 18 to 78 to gauge their sports gambling opinions.
The pollsters found that 44% of US adults support legal sports betting nationwide, while only 18% do not. However, the public is split on whether more sports betting will lead to more incidences of cheating and match-fixing.
Nearly half — 47% — of those polled said they’re concerned that the ongoing growth of legal sports betting could lead to more scandals.