Online Sports Betting Handle And Revenue
Revenue from online sports betting has flourished since the repeal of PASPA in 2018, beating the odds against a global pandemic and showing that the hobby is here to stay. More than a dozen states have opened their doors to online sports betting, with several more predicted to join their ranks in the coming years. Online sports betting opportunities have proven to be very financially beneficial to every state that has embraced them, with the less regulated states standing to benefit the most. More than $21.5 billion was legally bet on sports by Americans in 2020, and there is a clear trend of which states saw the majority of that revenue. The competition between online sports betting brands has been a driving force for revenue as they compete for availability, and in some cases like New Hampshire, total exclusivity in states.
Online Sports Betting Money Handled in 2020
|State:||Money Handled in 2020:|
|New Jersey:||$5.53 billion|
|West Virginia:||$265.3 million|
States Retail Vs Online Handles - August 2020
|State:||Retail Handle:||Online Handle:|
|New Jersey||$66,036,664 (10%)||$601,942,486 (90%)|
|Pennsylvania||$43,432,292 (12%)||$321,554,131 (88%)|
|Indiana||$20,163,026 (13%)||$143,900,567 (87%)|
|Colorado||$1,979,979 (2%)||$126,666,238 (98%)|
|Illinois||$16,066,250 (12%)||$34,993,351 (88%)|
|Iowa||$15,320,323 (31%)||$34,993,351 (69%)|
Online Sports Betting Revenue In 2020
|State:||Revenue In 2020:|
|New Jersey:||$359.4 million|
|West Virginia:||$15.3 million|
Why Is Online Revenue Not As High In Some States As It Is In Others?
It is clear that when online wagering options are available for state citizens, they tend to pull more revenue than their retail alternatives. There are some instances of states however, where online and retail revenue reporting are far closer in earnings than other states. Nevada for instance, pulled more revenue from its retail offerings in 2020 than from its mobile offerings. This is because while some states, such as Montana and Mississippi, do offer online wagering options like mobile applications, they are only usable when the user is physically on the premise of a retail establishment that offers sports betting. These restrictions severely affect the potential revenue of online wagering for the states that employee them.
What Sports Generate The Most Revenue From Online Sports Betting?
While there's no data on how much money is bet on individual sports specifically from online sports betting, there is a clear trend of which sports are most popular among sports bettors across the country. Football currently wears the crown of sports betting revenue in the United States. Between the NFL and college football, there's a lot of potential for fans of the sport who want to make it more interesting. The AGA estimates over $6 billion is bet on the Super Bowl every year, and roughly $100 billion is bet during the NFL season. While football may be second to none for online American sports betting fans, that doesn't mean other sports aren't pulling their weight. The NBA saw roughly $5 million bets in 2020 for their finals alone, with the MLB also pulling several hundred million dollars. There are dozens more sports and events that are bet on throughout the year, but ultimately football remains at the top in regards to generating online sports betting revenue.
Online Sports Betting Revenue Tax Contribution
Depending on the state, online wagering can sometimes account for the majority of money handled for sports betting in that state. This means that online sports betting can be credited for an enormous amount of the provisions states receive from taxing the subsequent revenue. For example, New Jersey made just under $400 million in revenue which generated $46,868,652 in tax dollars. Since roughly 90% of all of New Jersey's 2020 sports betting revenue is from online bettors, it's accurate to then say the state of New Jersey can thank online sports betting players for 90% of that $46.8 million in taxes. 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?
|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 fr om becoming a multi-billion-dollar industry in the span of only a few years however, and as more states begin launching their own sports betting operations, and previously established states find better footing for their online wagering options, the amount of revenue generated by the hobby could potentially double. Even in Nevada, largest retail sports betting attraction in the country, online wagering still nearly rivals in person betting with the state pulling 44.1% of its 2020 sports betting revenue from online wagering options. The online market for sports bettors has never been more accessible, and will likely continue to grow in accessibility and value moving forward.