Legal sports betting has emerged from the shadows to become a billion-dollar industry. As anti-gambling stigma has faded quickly in American popular culture, sports betting is now a billion-dollar industry. Millions of sports fans will soon enter the betting market for the first time. So what are the advantages of legal sports betting? In this article, you will learn why sports betting is so appealing to sports fans, and how it can affect state lotteries.
Legalization of sports betting in the U.S.
As more people realize, sports betting is the fastest growing industry in the United States. In fact, advertisements for sports betting are everywhere. The Associated Press, for example, has made fanduel.com the official provider of sports betting odds. But what is this industry and will it ever become legal in the United States? A decade ago, the Supreme Court ruled that sports betting was illegal in all but four states. But that did not stop the industry from exploding.
Today, 35 states have legalized or partially legalized sports betting. Of those states, 30 are up and running. In Kansas, sports betting was recently approved by Governor Laura Kelly. In California, competing measures will be on the ballot in November, but they’re not likely to pass. In Missouri, a bill granting native tribes exclusive control over betting passed the House, but failed to pass the Senate. It may have a better chance in 2023.
Increase in viewership
Deloitte Global predicts that by 2019, more than half of US sports viewers will place a bet. That percentage will rise to two-thirds among sports bettors in the age group of 18 to 34. Sports betting has been linked to an increase in interest in sports, with more than seven billion dollars in legal wagers on Super Bowl LVI. In fact, this will be nearly double the number of sports bets placed by non-bettors.
According to Nielsen, the number of viewers watching NFL games has increased over the past few years. NFL network viewership increased by 4.7% in the first half of 2019, pointing to the popularity of the sport in America. Though the exact number of bets placed on NFL games is unknown, this increase is encouraging considering the fact that Super Bowl LVI is right around the corner. The increase in sports betting will continue to be fueled by factors that are expected to increase viewership.
Increase in taxable revenue
The online gambling industry has been pushing for tax breaks for its promotional bets and free play earnings. In Colorado, Michigan, and Virginia, online sports betting operators can deduct these amounts. These deductions help offset societal costs associated with sports betting. These states also have revenue-sharing models that allow online sports betting operators to deduct up to 50 percent of their gross gaming revenues. These companies then pay 90 percent of their gross gaming revenue to the state.
Before the Supreme Court decision in 2018, sports betting was illegal in most states. As a result, states only recently began collecting revenue from sports betting. In fiscal year 2020, a handful of states that offer sports betting will collect over $200 million in tax revenue from this industry. With that money, states can use the money to support education and youth sports, as well as problem gambling campaigns. These are just some of the ways that sports betting has become legal in several states.
Impact on state lotteries
While most sports betting operations are state-owned, some have considered privatization. Privatization may improve efficiency and increase product innovation. In the United States, some states have considered allowing sports betting at casinos and racinos. However, if you look at the state lotteries of California and Illinois, the latter has been a pioneer in legalizing and operating sports betting. That said, the federal government has to approve all sports betting before it can be legalized and run.
For fiscal years 2008-15, real lottery revenues in the United States grew by about $1 billion, or 11.4%, in nominal terms. After adjusting for inflation, revenues increased only 0.2 percent, or $36.1 million. Across all states, however, the percentage of growth varies significantly. For example, the New England states experienced the largest declines in lottery revenues while the Southeast saw the largest increase. While this trend is encouraging, the state lotteries are still a major source of revenue for many governments.