State Tax Revenue From Sports Betting Jumps 35%

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States are reaping the benefits of legalized sports gambling in a huge way, to the tune of nearly $2.5 billion in tax revenue in 2023, according to a LendingTree analysis of government data.

That’s a year-over-year jump of 34.7% nationwide, with 19 states rising by at least 10.0%, including several that grew by 40.0% or more.

LendingTree analyzed U.S. Census Bureau state tax revenue data to see which states generated the most money from sports betting. What we found was that this activity — which just five years ago was legal in only a select few states but is now legal in 38 states plus the District of Columbia, with more likely to jump on board in the coming years — is generating enormous amounts of revenue in states in which it’s legal.

Also, we surveyed Americans and found that far more think sports betting should be entirely legal nationwide than shouldn’t. However, we learned that nearly half of Americans harbor real concerns that an increase in sports betting could lead to more cheating in sports.

Here’s more of what we found.

Editor’s note: State tax revenue figures from 41 states were included in the Census Bureau data. It includes revenue from parimutuel betting, such as horse and dog racing, which is why some states in which sports betting in general isn’t legal, such as Alabama and Texas, have reportable sports betting tax revenue.

  • Between 2022 and 2023, state government tax collection from sports betting rose 34.7%. In 2023, state governments recouped just under $2.5 billion from legal sports betting, up from more than $1.8 billion in 2022.
  • New York is the sports betting tax revenue capital of the country. In 2023, the Empire State collected $876.0 million in sports betting tax revenue, the most in the country. That represents a 24.1% increase from 2022.
  • Alabama, Nevada, Colorado and Virginia saw sports betting tax revenue shoot up by 40.0% or more in 2023. Overall, 19 states saw double-digit revenue growth, but these four states had the biggest year-over-year growth when excluding states in which online sports betting had just become legal in 2022 or 2023.
  • Twelve states collected less revenue from sports betting taxes in 2023 than in 2022, with Delaware topping the list. In that state, sports betting tax receipts fell by 44.3% between 2022 and 2023. Some of these states’ revenues were likely impacted by the legalization of sports gambling in neighboring states.
  • 44% of Americans say sports betting should be legal nationwide, while just 18% disagree. (38% didn’t give an opinion.) Currently, sports betting is legal in 38 states, plus the District of Columbia.
  • Nearly half of Americans are concerned that more sports betting will lead to more sports cheating. 47% say so, compared with just 15% who say they aren’t concerned. (39% neither agree nor disagree.)

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. 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. At the time of publication, that includes 38 states and the District of Columbia, with five others having active legislation or ballot initiatives supporting legalization, according to the American Gaming Association.

We looked at Census Bureau sports betting tax revenue data from 2022 and 2023 and saw massive growth in just a year.

Sports betting, at a glance

2022 tax revenue $1,840,074,000
2023 tax revenue $2,479,150,000
% change between 2022 and 2023 34.7%

Source: LendingTree analysis of U.S. Census Bureau Quarterly Summary of State and Local Tax Revenue data.

That 2023 total includes six states that raised more than $100 million in tax revenue from sports betting. In 2022, that number was just four.

Taxation rules, rates and policies can vary dramatically by state. That makes tax revenue an imperfect means for comparing the popularity of sports gambling among these states. However, given the importance of tax revenue to every state, these numbers are significant.

Among those six states that generated more than $100 million in tax revenue in 2023, one stood head and shoulders above the rest. It accounted for more revenue in 2023 than the other five states together.

Nevada, maybe, because of Las Vegas? New Jersey, thanks to Atlantic City?

Nope. It’s New York, concrete jungle where sports betting dreams are made of.

The Empire State brought in $876.0 million in state tax revenue in 2023, more than a third of the nation’s total for the year. That’s a 24.1% jump from $705.8 million in 2022.

10 states with most tax revenue from sports betting in 2023

State 2023 tax revenue
New York $875,996,000
Pennsylvania $176,655,000
Indiana $175,387,000
Illinois $161,437,000
Ohio $136,296,000
New Jersey $111,092,000
Massachusetts $99,470,000
Tennessee $83,557,000
Virginia $74,420,000
Maryland $64,483,000

Source: LendingTree analysis of U.S. Census Bureau Quarterly Summary of State and Local Tax Revenue data.

Many of the states at the top of this list — Pennsylvania, Indiana and Ohio, for example — may not necessarily be those that immediately jump to mind when thinking of gambling hotbeds. However, the amount of money these states generate from sports gambling is eye-opening.

Ohio, in particular, had the fifth-highest state tax revenue from sports betting in 2023, despite sports betting being legalized that year.

Ohioans clearly embraced sports betting in a big way. State tax revenue from sports betting jumped from about $3.7 million in 2022 to $136.3 million in 2023, but it was far from the only state that saw a massive jump in 2023.

Eight states saw increases of 40.0% or more, including Massachusetts (11,547.5%), Ohio (3,549.2%), Maryland (957.1%) and Kansas (406.4%), all of which saw stratospheric year-over-year growth after launching legal online sports betting in 2022 or 2023.

However, four states in which sports betting (or parimutuel betting in the case of Alabama) has been legal for longer still saw growth of at least 40.0% between 2022 and 2023:

  • Alabama (80.7%)
  • Nevada (71.5%)
  • Colorado (46.7%)
  • Virginia (40.2%)

Eleven others grew by double digits.

States where sports betting tax revenue grew by double digits between 2022 and 2023

State Tax revenue, 2022 Tax revenue, 2023 % change, 2022 to 2023
Massachusetts $854,000 $99,470,000 11,547.5%
Ohio $3,735,000 $136,296,000 3,549.2%
Maryland $6,100,000 $64,483,000 957.1%
Kansas $1,963,000 $9,941,000 406.4%
Alabama $5,141,000 $9,288,000 80.7%
Nevada $30,312,000 $51,971,000 71.5%
Colorado $18,198,000 $26,688,000 46.7%
Virginia $53,099,000 $74,420,000 40.2%
Wyoming $11,666,000 $15,503,000 32.9%
Louisiana $34,205,000 $44,310,000 29.5%
Arizona $26,736,000 $34,489,000 29.0%
New Jersey $86,637,000 $111,092,000 28.2%
New York $705,821,000 $875,996,000 24.1%
Tennessee $67,453,000 $83,557,000 23.9%
Illinois $133,019,000 $161,437,000 21.4%
Pennsylvania $151,344,000 $176,655,000 16.7%
New Hampshire $30,970,000 $35,572,000 14.9%
Oklahoma $1,053,000 $1,203,000 14.2%
Montana $50,821,000 $56,834,000 11.8%

Source: LendingTree analysis of U.S. Census Bureau Quarterly Summary of State and Local Tax Revenue data.

Among the fastest-growing states are two — Alabama (80.7%) and Oklahoma (14.2%) — in which sports betting isn’t legal in general. However, through parimutuel betting — a form of gambling, such as for horse racing, in which all the bets are pooled together, the odds are determined by the amounts bet on each particular competitor and the winning bettors collect their winnings from the pooled money — the states still generate significant tax revenue.

Sports betting isn’t booming everywhere, though. A dozen states saw their sports betting tax collection revenue fall from 2022 to 2023, including six where revenue fell by at least 20.0%. Delaware led the way, with a massive 44.3% drop.

States where sports betting tax revenue dipped between 2022 and 2023

State Tax revenue, 2022 Tax revenue, 2023 % change, 2022 to 2023
Delaware $13,494,000 $7,522,000 -44.3%
Nebraska $169,000 $107,000 -36.7%
North Dakota $1,742,000 $1,264,000 -27.4%
Mississippi $5,385,000 $4,130,000 -23.3%
Maine $1,497,000 $1,153,000 -23.0%
Washington $1,204,000 $946,000 -21.4%
South Dakota $252,000 $202,000 -19.8%
Rhode Island $25,693,000 $21,175,000 -17.6%
Iowa $19,640,000 $17,497,000 -10.9%
Texas $4,984,000 $4,751,000 -4.7%
West Virginia $5,247,000 $5,091,000 -3.0%
Indiana $177,753,000 $175,387,000 -1.3%

Source: LendingTree analysis of U.S. Census Bureau Quarterly Summary of State and Local Tax Revenue data.

While there are many possible reasons for each state’s decrease, one likely reason for several of these dips is the legalization of sports gambling in a nearby state. When that happens, people who might’ve crossed state lines to try their hand at gambling no longer need to. That money stays in the state, sending revenue higher at home (but at the expense of its neighboring states).

That may be the case in Delaware. Online sports gambling launched in Maryland in late 2022, meaning its residents no longer had to go to Delaware to gamble. Legalized sports betting in Massachusetts (launched in early 2023) may have had a similar impact in Maine and Rhode Island, while legalization in Kansas (launched in late 2022) could have impacted Nebraska and Iowa.

States where sports betting tax revenue increased/decreased most, 2022 to 2023

Rank State Tax revenue, 2022 Tax revenue, 2023 % change, 2022 to 2023
1 Massachusetts $854,000 $99,470,000 11,547.5%
2 Ohio $3,735,000 $136,296,000 3,549.2%
3 Maryland $6,100,000 $64,483,000 957.1%
4 Kansas $1,963,000 $9,941,000 406.4%
5 Alabama $5,141,000 $9,288,000 80.7%
6 Nevada $30,312,000 $51,971,000 71.5%
7 Colorado $18,198,000 $26,688,000 46.7%
8 Virginia $53,099,000 $74,420,000 40.2%
9 Wyoming $11,666,000 $15,503,000 32.9%
10 Louisiana $34,205,000 $44,310,000 29.5%
11 Arizona $26,736,000 $34,489,000 29.0%
12 New Jersey $86,637,000 $111,092,000 28.2%
13 New York $705,821,000 $875,996,000 24.1%
14 Tennessee $67,453,000 $83,557,000 23.9%
15 Illinois $133,019,000 $161,437,000 21.4%
16 Pennsylvania $151,344,000 $176,655,000 16.7%
17 New Hampshire $30,970,000 $35,572,000 14.9%
18 Oklahoma $1,053,000 $1,203,000 14.2%
19 Montana $50,821,000 $56,834,000 11.8%
20 New Mexico $1,139,000 $1,241,000 9.0%
21 Connecticut $20,059,000 $21,599,000 7.7%
22 California $18,313,000 $19,430,000 6.1%
23 Florida $11,963,000 $12,546,000 4.9%
24 Kentucky $51,255,000 $53,533,000 4.4%
25 Arkansas $5,806,000 $5,997,000 3.3%
26 Minnesota $1,527,000 $1,575,000 3.1%
27 Oregon $35,135,000 $35,818,000 1.9%
28 Michigan $17,338,000 $17,625,000 1.7%
29 Idaho $1,352,000 $1,356,000 0.3%
30 Indiana $177,753,000 $175,387,000 -1.3%
31 West Virginia $5,247,000 $5,091,000 -3.0%
32 Texas $4,984,000 $4,751,000 -4.7%
33 Iowa $19,640,000 $17,497,000 -10.9%
34 Rhode Island $25,693,000 $21,175,000 -17.6%
35 South Dakota $252,000 $202,000 -19.8%
36 Washington $1,204,000 $946,000 -21.4%
37 Maine $1,497,000 $1,153,000 -23.0%
38 Mississippi $5,385,000 $4,130,000 -23.3%
39 North Dakota $1,742,000 $1,264,000 -27.4%
40 Nebraska $169,000 $107,000 -36.7%
41 Delaware $13,494,000 $7,522,000 -44.3%

Source: LendingTree analysis of U.S. Census Bureau Quarterly Summary of State and Local Tax Revenue data.

While sports betting has exploded this decade, it remains illegal in several states, including California and Texas — the two most populous states and the ones with the biggest economies.

While other states may legalize sports betting in the coming years, it’s unlikely residents of the Golden State or the Lone Star State will have free rein to gamble on sports anytime soon, especially given California voters’ statewide rejection in 2022 of a proposition that would have legalized sports betting at tribal casinos in that state.

If many Americans had their way, however, sports betting would be legal everywhere. Our survey of more than 2,000 respondents found that 44% of Americans agree that sports betting should be legal nationwide, while just 18% disagree. (38% neither agree nor disagree.)

A deeper look at the numbers reveals some interesting divisions on this issue. Nearly 6 in 10 men (59%) agree that sports betting should be legal nationwide, compared with just 30% of women. Still, it isn’t that women oppose sports gambling in droves (22% say so, versus 13% of men). Rather, it’s that they don’t have an opinion. Among women, 48% say they neither agree nor disagree, while just 28% of men say the same.

Older Americans are the most likely to oppose the national legalization of sports betting. Nearly 3 in 10 baby boomers ages 60 to 78 (29%) disagree it should be legal nationwide, compared with 27% who agree. Contrast that with Gen Zers ages 18 to 27 (54% agree, 12% disagree) and millennials ages 28 to 43 (55% agree, 12% disagree), and the differences are stark.

Also, higher-income Americans are far more likely to support legalization than lower-income Americans. Among those making $100,000 a year or more in household income, 52% agree it should be legal nationwide, while just 36% of those earning less than $30,000 a year do.

Despite the enthusiasm for legalized sports betting, Americans are leery of what it could mean for their beloved games.

Nearly half of those surveyed (47%) agree they’re concerned that the growth of sports betting in the U.S. could lead to more cheating in games. Just 15% disagree, while 39% neither agree nor disagree.

Again, men are more likely than women to agree (52% versus 41%), while women are more likely than men to not have an opinion (46% versus 32%). However, across demographics, the percentages of those who say they’re not concerned about sports betting leading to cheating in games are largely similar — and small.

  • 16% of men, 13% of women
  • 16% of millennials, 13% of baby boomers
  • 16% of parents of kids younger than 18, 15% of those without kids
  • 17% of those making $100,000 or more a year, 13% of those making less than $30,000 a year

Americans’ passion for gambling is undeniable, but the inherent danger in it is, too.

That doesn’t mean you have to stay away entirely. As with so many potential vices in life, it can be a lot of fun and largely harmless when done in moderation. However, it can also cause real damage when done recklessly.

For example, using a credit card to gamble can be problematic. First and foremost, it can make it way too easy to overspend. Plus, it may be treated by the issuer as a cash advance rather than a regular purchase. That can mean that interest will start accruing immediately rather than after a grace period, and that additional fees may be tacked on. Of course, this assumes that your card issuer even allows you to use the card on gambling sites. That’s far from guaranteed, as many issuers will decline transactions attempted on these sites.

No matter how you pay for your gambling, tracking your spending (and winnings) can help. We think nothing of budgeting for passions like travel, the arts and dining out, but we might bristle at creating a line item in our budget for gambling. We shouldn’t, though.

If it’s something you love and spend a significant amount of money on, factoring it into your budget can be a way to manage it. Gambling is no different. If you have a great month, budgeting can allow you to spread that newfound wealth around to help with other financial goals. If you have a particularly rough month, the budget can show you where you might need to cut back to make up for the losses.

If your tracking shows that things are going too far too often, it may be a sign of a larger problem. Gambling addiction can be very real, very powerful and very damaging. If you or a loved one is struggling with it, please seek help through services such as the National Problem Gambling Helpline (1-800-GAMBLER) or the Substance Abuse and Mental Health Services Administration’s hotline at 1-800-662-HELP.

LendingTree analysts analyzed U.S. Census Bureau data to estimate where sports betting is growing the most.

Specifically, we utilized data from the Census Bureau Quarterly Summary of State and Local Tax Revenue and compared tax revenue from sports betting across each state that had data from 2022 and 2023. We then ranked the states from high to low based on the percentage change between those years.

Additionally, LendingTree commissioned QuestionPro to conduct an online survey of 2,025 U.S. consumers ages 18 to 78 from April 1 to 4, 2024. The survey was administered using a nonprobability-based sample, and quotas were used to ensure the sample base represented the overall population. Researchers reviewed all responses for quality control.

We defined generations as the following ages in 2024:

  • Generation Z: 18 to 27
  • Millennial: 28 to 43
  • Generation X: 44 to 59
  • Baby boomer: 60 to 78

Source

This article originally appeared on LendingTree and was syndicated by MediaFeed.

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This article originally appeared on LendingTree and was syndicated by MediaFeed.

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