State-Level Earnings from Taxes on Sports Wagering
Legality of sports betting has expanded to 38 states alongside D.C., resulting in $6.5 billion in tax income for the states since the Supreme Court's 2018 decision allowing state-level legalization of sports betting.
For a look into the state-wise tax revenue from sports betting and areas with the most betting activity, keep reading.
State-wise gambling tax revenue
State-wise gambling tax revenue
New York leads the pack in terms of tax revenue from sports betting, fetching close to $2.3 billion since May 2019.
Sportsbooks have also experienced significant revenue growth in New York, aggregating $4.6 billion from the gamblers since the legalization.
New Jersey experiences the most disparity between sportsbook revenue and state tax revenue. The state has amassed only around $533 million from its $4.2 billion in gross sportsbook revenue since the legalization in June 2018.
In contrast, South Dakota has the least revenue generated from sports betting, with merely $234,028 in income. This low revenue is primarily due to betting opportunities being limited to just seven casinos (six in Deadwood and one in tribal casinos), thereby decreasing the possibilities for gambling.
Investment opportunities in sports betting companies
Leveraging the sports betting growth
The rise of sports betting has become ubiquitous in legal states, with high-visibility advertisements and daily odds discussions on sports media. North Carolina is the most recent state to integrate sports betting, with online platforms set to launch in March 2024.
The total value of sports betting handle (amount wagered) has seen a substantial increase, rising from $4.6 billion in 2018 to $121 billion in 2023, indicating a strong interest in wagering on sports in the US.
Amid increasing competition for wager revenue among established gambling companies like MGM Resorts (NYSE:MGM) and Caesars Entertainment (NASDAQ:CZR), and new entrants specializing in sports betting like DraftKings (NASDAQ:DKNG) and FanDuel (owned by Flutter Entertainment [LON:FLTR], [OTCMKTS:PDYP.Y]), the sports gambling market is a promising investment opportunity.
Despite strong revenue growth, the companies' revenue as a percentage of the bet handle has not expanded significantly, remaining around 9.3% of the nearly $97 billion wagered (as of September 2024), amounting to approximately $9 billion.
Investors considering an investment in the industry can explore the seven investment ideas provided by our website for backing sports betting stocks. Given the increasing support for sports betting across half of the US states, the industry holds a strong potential for growth.
Sources
- Sportshandle.com (2024). “Total US Legal Sports Betting Revenue, Handle, and Tax Totals Since PASPA Repeal.”
- State tax and gaming agencies.
Jack Caporal has no position in any of the stocks mentioned. Our Website has no position in any of the stocks mentioned. Our Website has a disclosure policy.
The expansion of legal sports betting has led to significant research into its financial impacts. For instance, New York has generated over $2.3 billion in tax revenue from sports betting since May 2019.
With the rise of sports betting, financial institutions and investors are showing increased interest in companies like MGM Resorts, Caesars Entertainment, DraftKings, and FanDuel, seeing the market as a promising investment opportunity.
