How Has the Legalization of Sports Betting Affected Different States?
The US Supreme Court cleared the way for states to legalize sports betting in 2018. Three years later, many states have already legalized or are in the process of legitimizing the industry.
Some states—New Jersey and Pennsylvania—generate hundreds of millions of dollars in revenues. Others—Utah and Hawaii—are yet to reap the benefits of legal sports gambling due to their strict laws.
Below is an overview of legal sports betting around the country.
#1: 20+ States Support Sports Betting
Before the Supreme Court struck off PASPA in 2018, only Nevada and a few more states had the liberty to provide sports betting. Post PASPA, over 20 states now allow their citizens to bet on sports in-person or through betting apps.
Delaware, the first state to legalize online casinos in 2012, became the first state to legalize sports betting in 2018. New Jersey, which sponsored the bill to challenge PASPA and won, was second.
Within one year, Mississippi, West Virginia, New Mexico, Rhode Island, Arkansas, New York and Iowa had also legalized sports betting. Oregon, Indiana, Illinois, Michigan, Colorado, Montana, D.C., North Carolina, Tennessee and Virginia permitted sports betting later in 2019 or 2020.
#2: In-Person vs Mobile Betting
Although many states are in support of legal sports betting, they disagree on how to run betting. Some states think in-person betting is the safest way to run the industry. Others believe mobile betting is the sector’s future.
Arkansas, which legalized betting in 2019, chose to legalize in-person betting alone. Delaware, as we mentioned earlier, authorized betting in May 2018. But due to its expensive mobile betting rules, investors have avoided starting online sportsbooks in the state.
Illinois, which joined the bandwagon in March 2020, supports mobile betting. But you need to register in-person at a state-based bookmaker. Indiana, Iowa, Nevada and New Jersey support both in-person and online betting.
On the other hand, Mississippi, New Mexico, North Carolina and North Dakota permitted in-person betting alone. Initially, New York belonged to this list. But it has since expanded its laws to accommodate online betting.
#3: Some States Need more Time
Not every state is excited to legalize sports betting. Alabama, Georgia, Kansas, Kentucky, Maine, Massachusetts, Missouri, Ohio and Vermont and bills about sports betting still on the deck.
Is sports betting legal in Oklahoma? A year ago, two tribes signed deals with the state to run sports betting. Unfortunately, Oklahoma later invalidated the agreements, throwing the possibility of legal sports betting into limbo.
Minnesota, South Carolina, Texas and California have had similar issues. Tribes or local investors have showed interest in running sports betting. Or legislators have tabled bills to move forward with legal betting. But somehow, the efforts failed.
Some states—Alaska, Hawaii, Idaho, and Utah—have not discussed legalizing sports betting to date. Many of these states have been against legal gambling for decades. So, it will take a lot of time before change happens.
#4: Fast Growth in Legalized States
Many states with legal sports betting have no regrets about their decisions. Take New Jersey as an example. After legalizing both in-person and mobile betting in 2018, the Garden State generated $400M as tax from the industry in 2019.
The entire sports betting industry in NJ is now worth $6 billion. Interestingly, Garden State generates most of its sports betting revenue from online bettors (80%). Some 20% of the state’s revenue come from tourists who live in New York. It’s probably the reason the Empire State chose to permit mobile gaming apps too.
NJ aside, Pennsylvania and Nevada are other states that generate millions of dollars every month through sports betting. Of course, Nevada has always permitted betting. But PA joined legal sports gambling a couple of years ago.
Many states with legal sports betting have laws meant to maximize their revenues from the industry. For starters, they charge up to $10M in renewable license fees. Additionally, they charge sportsbooks up to 51% of their income as tax.
#5: Revenues Used for Important Courses
States are keen to utilize sports betting revenues for maximum benefits. In fact, some jurisdictions had to discuss how to use betting income with legislators and voters before they legalized the industry.
In many cases, betting dollars go towards expanding public education, health and general infrastructures. Sadly, states don’t generate the same amount of money from betting. And as a result, some jurisdictions may get disappointed for not funding new roads or rehabilitation centers with betting dollars.
Of course, states have leeway to legalize online casinos to increase their budgets. New Jersey, Delaware, West Virginia and Pennsylvania support online casinos with progressive laws—not so much for Delaware.
However, a majority of states are yet to tap the online casino space. Surprisingly, most states allow lotto games, bingo and sports gambling.
#6: Protecting Young Athletes
Post PASPA—states took over the responsibility of protecting the integrity of college and high school games by banning betting on these games. The specific laws vary by state—most states prohibit betting on games involving in-state colleges.
However, you can wager on out of state college games. When it comes to high school games, you can’t bet on any of them. That said, you can wager on most major league games in the US and around the world.
#7: Sports Data Requirements
Before sports betting became legal, Major Leagues had requested to be paid to share official league data. They also wanted compensation because compliance requirements would increase. Fortunately, public complained and the idea lost its momentum.
All the same, it’s become standard for states to require betting companies to use official league data for setting odds. This is meant to protect the integrity of sports, to limit corruption and match fixing.
To be clear, not every state has the requirement. Michigan, Illinoi and Tennessee are some of the states with this condition. It mostly applies to live betting—wagering while a game is in action. For pre-match betting, sportsbooks have the freedom to use additional data to set their odds.