Super Bowl betting to set new records as states adopt sports gambling

A record number of Americans plan to spend more than $7.6 billion on this weekend’s Super Bowl as states across the nation race to legalize — and profit from — sports betting.

The number of Americans who use legal betting options is growing rapidly, after a 2018 Supreme Court decision allowed states to adopt legal sports betting. Thirty states and the District of Columbia have live, legal betting markets, after ten more states launched their betting options in the last year.

“I’ve never seen anything move as quickly in the states as legal sports betting, and there’s a reason for that,” said Bill Miller, president and chief executive of the American Gaming Association (AGA), the industry trade group. “Americans love sports, and Americans like wagering on sports. And now it’s legal for them to do that.”

The AGA estimates that 31.5 million American adults will place wagers on the game this year, up 35 percent from last year’s Super Bowl. In 2021, Americans wagered $3.3 billion on the clash between the Tampa Bay Buccaneers and the Kansas City Chiefs.

This year, 55 percent of those surveyed by AGA said they planned to wager on the Los Angeles Rams, who are favored over the Cincinnati Bengals. About half of those who say they plan to place bets say they will use an online marketplace, a retail sports book or a bookie; the other half plan to wager casually with friends or as part of a pool.

The proliferation of online sports betting has been a massive boon to both the industry and states that have allowed it. In 2021, Americans put down $57 billion on sporting events, generating almost $4.3 billion in revenue for the companies that host platforms and $700 million in federal and state tax revenue.

“We’re starting to see this become a big moment for tax revenues and government interest,” said Brett Abarbanel, director of research at the International Gaming Institute at the University of Nevada, Las Vegas.

This year, industry estimates project massive growth. In just the first three weeks in which mobile sports betting was allowed in New York, beginning last month, bettors wagered more than $1.17 billion, according to the state Gaming Commission. Half of the gross betting revenue goes to the state, a new national record, the commission said.

Industry leaders are salivating at the prospect of gaining access to other major markets. Supporters of legal sports gambling in California have launched four separate ballot measures aiming to open access; legislators in Texas are likely to consider sports betting in next year’s legislative session. North Carolina Gov. Roy Cooper (D) said Monday he backs a bill before the Republican-controlled state Senate that would legalize mobile gambling.

“The issue is, will North Carolina try to be on the cutting edge for the technology jobs and other employment that it will create, and plus be able to get state taxpayers their cut, or are we just going to let it happen all around us?” Cooper said on a Raleigh News & Observer podcast. “I think it’s time for us to step up and do it.”

Peter Schoenke, president of Rotowire, a fantasy sports information hub, said the industry is pushing legislators in Missouri, Kansas, Georgia and Massachusetts to adopt new legal frameworks this year.

“There’s still a number of states out there that have gotten close to passing bills in the last few years and hopefully will get it over the finish line,” Schoenke said in an interview. “Usually when a state passes a sports betting law it takes anywhere from six months to two years to go live, writing the regulations and all that.”

The biggest remaining market that has not yet made substantial progress is in Florida. Earlier this year, supporters of legalized sports betting acknowledged they would not meet a deadline to gather enough signatures to get a proposed constitutional amendment on the ballot. They will not be able to try again until 2024.

The growth in the sports betting industry has come alongside a renaissance in America’s gambling mecca, Nevada. Casinos in the Silver State reported ten straight months of more than $1 billion in revenue last year, ending 2021 with a record $13.4 billion in pre-tax wagers, the Gaming Control Board said last month.

Some industry experts acknowledge that opening access to sports betting carries inherent risks to a portion of the population prone to problem gambling — risks that are exacerbated because new technology allows someone to access gambling markets without setting foot in a brick-and-mortar establishment.

“The big differentiator here was really about access. From a consumer and a regulatory aspect, it’s much more immediate access to information and activities via your mobile device,” Abarbanel said in an interview. “The ability to access that everywhere has brought up a lot of concern.”

The American Gaming Association’s study pointed to an increase in the number of Americans who recall seeing messaging about responsible betting over the last year as evidence that the industry is taking care to assist those who might be problem gamblers.

Miller said the industry still faces serious competition from the illegal gambling market, which captures billions in sports bets, a competition not unlike the rivalry between the legal and illegal marijuana markets.

“There is still a very strong illegal market out there. So if you make a legal market prohibitively expensive from a tax perspective or a regulatory perspective, they will stay in the illegal market,” he said. “Our counsel has been create a reasonable tax rate, make sure that the betting options are similar to what all of the market allows for, and make sure that we’re doing everything that we can to use law enforcement resources to weaken and quite frankly destroy the illegal market.”