In 2018, the United States Supreme Court ruled that the state of New Jersey would be allowed to open up sports betting markets on-land and online. This ruling set a precedent that would allow other states to create a legal framework to regulate and tax sports betting activities.
Prior to this 2018 ruling, only the state of Nevada enjoyed the right to regulate legal sportsbooks, which made the state (along with Las Vegas) the US’s one-stop-shop for all gaming-related activities. However, this didn’t create a healthy sports betting industry.
In fact, in 2018, Nevada broke sportsbook records in the United States with a revenue of $5 billion USD, but, according to Statista, in the same year in the UK, sports betting netted a cool $18 billion.
Despite the fact that the US has five times more people and four of the world’s largest and most lucrative major league sports, the UK nearly quadrupled US figures showing the American betting market is underperforming, but this is likely to change soon.
Washington, Tennessee, North Carolina, Virginia, and Washington DC are the latest states to pass a bill that’ll allow for the proper regulation of the local betting markets. Now sports fans will have access to casino offers from leading sportsbooks such as DraftKings and the ability to start wagering also on sports from the PGA Tour to MMA wrestling to NASCAR.
It should be noted that each state handles its marketplace differently. Taxation differs, as well as the expansion of marketplaces from solely in-person transactions to mobile and online sportsbooks. Let’s take a look at some of the US’s most progressive states when it comes to sports betting.
Though New Jersey battled the Supreme Court for sports betting to be legalized federally, the state of Delaware managed to open their books earlier than their neighboring state by six days. On June 5, 2018, the state’s first wager was taken at the Dover Downs Racetrack.
In Delaware, sports betting is taxed according to a revenue-sharing model determined by lawmakers and taxpayers. This model sees the state take a cool 50% of revenue from land-based casinos. Keep in mind, Delaware has yet to legalize online gaming and betting.
On June 11, 2018, New Jersey opened its casinos to bookmakers. Unlike Delaware, New Jersey immediately opted to undertake mobile betting and gaming. On July 18, 2018, online gaming and betting were fully regulated and open for business.
Given New Jersey’s history with gaming in places like Atlantic City, adapting successful gaming models into online platforms has been easy for businesses, as well as lawmakers. By 2019, New Jersey handled $4.5 billion in sports bets.
The state’s tax rate for sports betting is differentiated by land-based sports revenue (8.5 percent), casino-based online sports betting revenue (13 percent), and racetrack-based online sports betting revenue (14.25 percent).
In New York, sports betting has been legalized at commercial casinos since 2013. However, given the gap between state and federal law, sportsbooks weren’t fully legalized until new legislation was introduced in 2019 following the 2018 Supreme Court ruling on sports betting.
At the moment, online and mobile sports betting aren’t legal, though many are poised to enter the market once this legislation has been articulated. Currently, New Jersey’s robust online sportsbooks are ready to enter the market.
However, New York is currently in a battle with the state Attorney General over the exact interpretation of the state’s constitution, which complicates the legalization of sports betting.
In particular, fantasy sports betting has been challenged by the Attorney General, though it was supported by the same Supreme Court Justice who ruled in the 2018 sports betting case.
Illinois legalized online and retail sportsbooks simultaneously on March 9, 2019. A few of the state’s successful land casinos debuted online sportsbooks, though online variations didn’t appear until a couple of years ago, in 2020, when online sports wagering officially opened on June 18, 2020.
Unlike other states, Illinois has taken concerted efforts to unite their sportsbooks with the state’s major league franchises. For instance, betting is available on-location at Wrigley Field, which is home to one of the MLB’s most notorious franchises: the Chicago Cubs.
Currently, major global brands are accessible for online wagering, as well as major DFS services. Pretty soon, more states will open up the sports betting so we can expect steady growth of the newly regulated industry.
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