The United States has the potential to have the largest sports betting market in the world if only this were made legal in the country. As it is, the Americans have demonstrated their passion for sports betting by wagering a stupendous amount of it through illegal channels. This season’s NFL and college football alone is expected to generate $95 billion of illegal wagers. A report by GamblingCompliance highlighted the enormity of this issue.
According to the GamblingCompliance report, sports betting volumes in the United States is generated predominantly from retail, online and casinos, in that order. As a matter of fact, casinos account for a mere 12% of the revenues from sports wagering. One important reason for this is the inaccessibility of many casinos, especially the ones that are located in tribal areas. Surprisingly, even the state of New Jersey faces this problem since Atlantic City is located quite far away from the population centres in the state. Furthermore, not every state in the US has a casino.
There are plenty of gambling and lottery retail outlets in the United States, in addition to sports bars, as a result of which retail outlets account for half of the legal sports betting in the country. However, the vertical to watch out for is online gambling. If you were to consider some gambling figures generated in New Jersey, online casino revenue accounted for 4% of the overall casino revenues as compared to online sports betting, which resulted in a whopping 36% of total revenues.
The rapid growth in online gambling, and the fact that sports wagering is an important part of it, means that growth in the sports betting industry, if legalised, will come from this vertical. While commercial and tribal casinos are still expected to lead the industry, sports betting is expected to overtake lotteries in total revenues generated annually.
The case is very strong for sports betting in the United States to be legalised eventually. However, the Professional and Amateur Sports Protection Act (PASPA), which was passed in 1992 makes sports betting illegal in all, but a few states. A few states are planning to introduce legislation to rectify this anomaly because the revenues that can potentially be generated in taxes are incredibly high. States such as California, New Jersey and Pennsylvania are taking steps to work around the federal law. In addition, Indiana, Minnesota, Mississippi, New York, South Carolina, and Texas also have plans to address this issue legally.
It is very clear to see that pressure is mounting on the federal government to repeal the law. As of now, the professional sports leagues in the US have put their weight behind this legislation and they have also taken to the courts to oppose any attempts to legalise sports gambling. Interestingly, the commissioners of the NBA and MLB have both indicated, at different times, that the issue of sports betting should be considered anew. It remains to be seen whether federal legislators are willing to change their stand on sports betting, considering that they are currently turning their back on billions of dollars in taxes.