Online Sports Betting Handle And Revenue
Revenue from online sports betting has flourished over the last few years, with US sportsbooks marking $11.0 billion for 2023. With more than two dozen states with online sportsbooks, it's easy to see why the sports betting handle for 2023 was over $121 billion. Considering state governments received over $2 billion collectively from sports betting, a multi-billion dollar a year industry would be an undershoot. Online sports betting has proven to be very financially beneficial.
Largest Sports Betting Markets In The US
| State | Money Handled Through Q1 2024 |
|---|---|
| New Jersey | $48 billion |
| New York | $40 billion |
| Nevada | $39 billion |
| Nevada | $2.43 billion |
| Illinois | $32 billion |
| Pennsylvania | $28 billion |
| Colorado | $17 billion |
| Indiana | $16 billion |
| Arizona | $15 billion |
Online Sports Betting Revenue (2023)
| State | 2023 US Sportsbook Revenue By Month |
|---|---|
| January | $1,061,426,937 |
| February | $707,294,330 |
| March | $1,079,620,026 |
| April | $861,987,925 |
| May | $919,744,191 |
| June | $547,732,406 |
| July | $618,981,372 |
| August | $620,658,095 |
| September | $1,128,990,088 |
| October | $1,220,024,221 |
| November | $936,747,710 |
| December | $1,355,924,337 |
Why Is Online Revenue Not As High In Some States As It Is In Others?
There are many factors breaking down why online revenue for sports betting is not as high as it is in other states.
- Online Options: It's been clear that online sports betting brings in more revenue than retail locations. In the past, Nevada sportsbooks would see action mainly in person. Since the COVID shutdown, using US sportsbook apps has become the norm. Still, in 2024, states like Mississippi and Montana do not offer online gambling. This makes it much harder to compete with states that allow betting on your phone.
- Size Of Market: Not every state has the same population or sports-driven community. It's hard to compare between states when factoring in per capita and population. Even in states with online sportsbooks, seeing what Boston can wager on versus those in Springfield makes it easy to compare.
- Tax Rate: Once the sportsbook does its job, it still have to pay government taxes just like us. However, their tax rate is set by the state they're in. These varying levels allow some states to capitalize on the industry, while other states use it as another source of income. Take New York sportsbooks vs New Jersey sportsbooks: They have seen about the same amount of money bet in their state. But, NY's 51% tax rate means New York has seen nearly three times the revenue of New Jersey, as their tax rate is closer to 12%.
What Sports Generate The Most Revenue From Online Sports Betting?
Many are quick to point out that football is king at sportsbooks. While they are not wrong, it doesn't generate the most revenue amongst sports. That title belongs to basketball. With March Madness betting on top of the NBA, WNBA, and college basketball seasons as well as varying leagues and tournaments like the Big 3, St33t, Euroleague, FIBA, and the Basketball Tournament, US bettors can't get enough of the sport.
The hype still centers around the best online sportsbooks with NFL bets, as the weekly schedule helps to create more buzz for a third of the year. But as basketball plays out for three-quarters of it, it is the secret revenue generator for online sportsbooks. Take Colorado's revenue report from January 2024 as an example, where basketball beat out the NFL playoffs in action.
Online Sports Betting Revenue Tax Contribution
The allocation of tax dollars from online sports betting revenue varies from state to state; in most cases the money is simply put into the state's General Revenue Fund, but sometimes it's utilized for specific reasons, like programs meant to assist residents with gambling addictions or state projects like water or roads.
What Do Online Sports Betting Taxes Fund?
| State: | Funding Recipients: |
|---|---|
| Nevada: | To state programs such as education and public health initiatives. |
| Delaware: | 39% to the State General Fund; 43% to the racetracks as commission; 10% for horse racing purses; and 8% in vendor fees. |
| New Jersey: | Utilized to further develop its casino and gaming industries |
| Mississippi: | To DOT’s maintenance of roads and sewers, and sel ect cities to use at their discretion. |
| West Virginia: | Public Employees Insurance Agency Financial Stability Fund |
| Virginia: | 2.5% goes to problem gaming initiatives with the remainder going into the state's General Revenue Fund |
| Pennsylvania: | Placed into the state's General Revenue Fund |
| New York: | Education programs, local municipal and county governments, and tax relief |
| Rhode Island: | Placed into the state's General Revenue Fund |
| New Hampshire: | Education programs |
| Arkansas: | Placed into the state's General Revenue Fund |
| Oregon: | Dedicated to help pay down the state’s public pension liability. |
| Iowa: | Placed into the state's General Revenue Fund |
| Illinois: | Infrastructure projects like schools and recreational facilities |
| Tennessee: | 80% to an education fund, 15% to local government use, and 5% to treating gambling addiction across the state. |
| Michigan: | School Aid Fund, and cancer treatments for firefighters. |
| Colorado: | Gambling addiction programs and a water fund for the state. |
| Montana: | Placed into the state's General Revenue Fund |
The Future of Online Sports Betting Revenue
Legal sports betting across the USA is still in its infancy stages, having only been unrestricted by federal law in May of 2018. This has not stopped it from becoming a multi-billion-dollar industry in the span of only a few years. The amount of revenue generated by the hobby could potentially double, especially as states modify their online sportsbooks and laws for them. The online market for sports bettors has never been more accessible, and will likely continue to grow in accessibility and value moving forward.
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