May 8, 2024 3 min read

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New Study Explores the Benefits of Sports Betting Taxation

Comprehensive data revealed that US states taking advantage of the regulated sports betting market could have a significant edge in their funding capabilities

Many US states are reaping the rewards of legalized sports gambling, with tax revenues soaring to nearly $2.5 billion in 2023, according to a recent analysis conducted by online lending marketplace LendingTree. This sum represents a substantial year-over-year increase of 34.7%, demonstrating the growing popularity and profitability of the gambling sector nationwide.

Sports Betting Tax Revenues Remain on the Rise

LendingTree analyzed US Census Bureau state tax revenue data to assess the financial impact of sports betting legalization while considering gambling’s broader implications. The findings reveal a significant surge in tax revenue generated from legal sports betting activities, with 19 states experiencing double-digit growth and several states witnessing remarkable increases of 40.0% or more.

New York was the clear leader in sports betting tax revenue, securing $876.0 million in 2023, a substantial 24.1% year-on-year increase. This impressive figure underscores the significant economic contributions of sports gambling to state coffers. Many jurisdictions rely on these funds to bolster their education and community-focused initiatives, hopefully offsetting gambling’s negative societal impact.

It’s practically impossible to watch any sporting event today without being inundated with advertising for sports betting sites. That big business means big money for the states in which it’s legal.

Matt Schulz, LendingTree chief credit analyst

Despite the overall upward trend, some states experienced declines in sports betting tax revenue in 2023 compared to the previous year. Delaware, in particular, saw a notable decrease of 44.3%, partially attributed to the legalization of sports gambling in neighboring states, discouraging gambling tourism and diverting potential revenue from the First State.

The Sector Has Some Inherent Issues

The data further highlighted the significant revenue potential of sports betting, even in states that only recently legalized the activity. Ohio, for example, experienced a meteoric rise in sports betting tax revenue, soaring from approximately $3.7 million in 2022 to $136.3 million in 2023, demonstrating the robust demand for legal sports gambling options.

The analysis also delved into public sentiment surrounding sports betting, revealing a considerable percentage of Americans support its legalization nationwide. 44% of respondents favored nationwide legalization, while only 18% disagreed. However, concerns about the potential consequences of increased sports betting were prevalent, with 47% of Americans expressing worries about compromised sports integrity.

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

Matt Schulz, LendingTree chief credit analyst

While the survey highlighted the substantial taxation benefits of regulated sports betting, it also drew attention to the potential societal dangers like gambling harm and addiction. As more states continue legalizing and regulating sports betting, lawmakers must carefully balance industry interests and consumer protection, ushering in a safe and sustainable market where the benefits outweigh the negatives.

Deyan is an experienced writer, analyst, and seeker of forbidden lore. He has approximate knowledge about many things, which he is always willing to apply when researching and preparing his articles. With a degree in Copy-editing and Proofreading, Deyan is able to ensure that his work writing for GamblingNews is always up to scratch.

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