Legalized Sports Betting Revenues Break $125bn Barrier in the US Since PASPA was Annulled

Since the U.S. Supreme Court overruled the Professional and Amateur Sports Protection Act (PASPA) in May 2018, the US sports betting industry has been on a one-way ticket upwards. The market has sky-rocketed in the last few years, as multiple US states awoke to the prospect of launching fully regulated licensed sports betting and its potential financial implications.

It was recently the four-year anniversary of the PASPA ruling, introduced by the state of New Jersey, and at the four-year mark, both retail and online sportsbooks were rejoicing at breaking the $125 billion barrier for their total handle since May 2018.

Former NJ state senator Lesniak proven right about the potential for a regulated iGaming sector

Ray Lesniak, the state senator that filed the initial lawsuit against the federal government over PASPA, has since retired but looks back with fond memories at his bold efforts. These efforts were designed to generate more tax revenues for states, provide better protection than black market operators for customers and entice the most established sportsbook brands from Europe across the Atlantic. Lesniak has been proven right for his stance given that all the above scenarios have since occurred in the US market.

Lesniak described his role in the repeal of PASPA as placing a “good bet for New Jersey and for America”. Lesniak would go on to submit the first legalized sports wager in the Garden State, which would go on to become a +800 winning bet on France to win the 2018 FIFA World Cup. Some of the US states with the biggest economies and demographics suited to legalized sports betting are thriving. In New York, the Empire State posted a sports betting handle of $1.66 billion in January 2022, followed by $1.52bn in February 2022 and $1.63bn the following month for “March Madness.”

Even some of the lesser-populated US states have managed to achieve record breaking returns on their regulated sports betting. In the Mountain West region of western US, Montana saw a 41% year-on-year rise in the number of Super Bowl wagers placed. As of March 2022, Montana took $3.98m in retail and online sports wagers, with the state taking more than $10m in tax revenues since its legalization in 2020.

Having a single point for online sports wagers in the form of state lottery-governed Sports Bet Montana has been a solid proving ground for a possible legalization of online casino gambling in the state. The iGaming scene is still in its early stages across the US. Even the biggest names in the US gambling industry are still yet to proliferate. BetMGM, operated by highly acclaimed MGM Resorts International, is currently only operational in four US states according to OddsChecker, namely New Jersey, Michigan, Pennsylvania, and West Virginia.

The $125bn wagered among American sports fans since 2018 is, on balance a figure worth more than the net income for all the nation’s farmers in 2021. It is also, for example, a shade over the total amount spent on veterinary care and pet supplies last year across the continental United States. That $125bn was not all retained by the sportsbooks, of course. In fact, once customer payouts and license fees are taken into consideration, the average return a sportsbook makes is a touch under 10% per operator, according to the American Gaming Association (AGA).

The pace of growth stateside has even taken the biggest operators by surprise

Some of the senior figureheads at the biggest names in US sports betting were wholly unaware at the potential of the US market. Matt Kalish, co-founder of DraftKings Sportsbook said that sports betting has grown in popularity because people “like to predict things” and “compete with friends.” Meanwhile Karol Corcoran, general manager of FanDuel Sportsbook, admitted that no-one “would have expected how big the [industry] would be” in such a short space of time.