How Much Money Do Americans Bet On Sports?
If you’re a sports bettor, chances are good that you want to know how big your community of wagering enthusiasts is. But if you type “How much money do Americans bet on sports” into Google, you won’t really get a solid or accurate picture. After all, only legal land-based (and very limited Internet-based) sports wagering is actually tracked and tabulated, with the dramatic majority of it going to black market and gray market vendors, as well as to legal offshore sportsbooks (none of whom are compelled to divulge the volume of their business). However, considering that there are only a limited number of legal sports betting options at land-based venues in the US (despite the recent overturn of the Professional and Amateur Sports Protection Act, or PASPA), the reported numbers – while enormous – are at best a tiny fraction of the true handle turned by US sports bettors each year.
Over 60% of US residents identify as sports fans, but not all of them wager on sports. The closest metric we have to go on about how many people bet on sports – and thus how much money Americans bet on sports – is to use as a baseline the only long-running sports wagering mecca: Las Vegas (or Nevada, more generally). With PASPA gone, of course, NV is only the best baseline, not the only one. However, given its more mature commercial sports betting market, it’s the easiest state from which to divine out some workable figures (though we will also discuss other states’ sports wagering markets below). To wit: Each year, the Nevada Gaming Control Board (NGCB) puts out its report of exactly how much handle and revenue sportsbooks in the state account for. If we take the total sports wagering handle in NV and divide it by the total NV casino traffic, that should give us – at the very least – a picture of how many gamblers wager on sports (or would wager on sports, given reasonable proximity to a sportsbook). This is an inexact exercise, and the margin of error is obviously going to be enormous. But at least it goes us something to work off of.
How Much Money Is Bet On Sports In Nevada?
As the gambling mecca of the United States and the first (and for a long time, only) state with single-game wagering, sports betting is big business in the Silver State. Even with the betting variety in Nevada, there are definite trends in how bettors spend their cash in Vegas. The Super Bowl tends to break single-game handle records every year, while March Madness also boasts huge betting numbers. But these are extremes, and the yearly average here is what we’re after, as sports betting is more or less a 24/7 proposition.
While it’s difficult to peg down the total NV gambling tourism rates, we can go with Las Vegas’ numbers here, knowing that these figures will trend conservative. Over the last few years, Las Vegas is averaging nearly 40 million visitors annually. In 2017, 39.1 million gamblers visited Sin City. Among those visitors, the NGCB indicates that NV sportsbooks cleared at least $250,000,000 in revenue at an average 5.1% house take. This equates to roughly $4.9 billion in annual handle. Divided by the number of visitors (39.1 million), and you get $122.50 of handle spent by each gambler in NV.
How Much Money Is Bet On Sports In Other States?
As stated, Nevada isn’t the only game in town when it comes to sports betting anymore, as several other states have started offering sports betting products since the PASPA overturn. While it’s difficult to know exactly how much money is bet on sports in other states, a few have started releasing their monthly numbers. Acting immediately after PASPA was eliminated, seven states (DE, NJ, MS, WV, PA, RI, and NM) offered legal sports betting at land-based venues before the end of 2018, which was a very impressive turnaround indeed. Of these states, the total handle – or how much money Americans bet on sports in each state – is shown below.
Note: As yearly figures are not yet available, we have taken the monthly averages for all states with legal sportsbetting which have reported their wagering statistics. Yearly extrapolations thereof are informative, but they should be taken with a big grain of salt, as the sports betting handle is projected to increase month-to-month and year-to-year in all the states with legal sports betting, particularly as more betting lounges open in each region.
- Delaware: $15.4 million monthly, $184.8 million yearly (extrapolated)
- New Jersey: $205 million monthly, $2.46 billion yearly (extrapolated)
- Mississippi: $36.3 million monthly, $435.6 million yearly (extrapolated)
- West Virginia: $18.4 million monthly, $220.8 million yearly (extrapolated)
- Pennsylvania: $16.7 million monthly, $200.4 million yearly (extrapolated)
Money Spent On Sports Betting By Americas Via Offshore Sportsbooks
If we extrapolate the above NV numbers and apply them to the entire country, they’re actually not that high. Given that 80% or so of US adults – or about 198,000,000 people – actively gamble (including playing lotteries, which complicates things less than one might think, given the ease of access to legal offshore sportsbooks), we can plug in the sports-betting-handle-per-person figure from before, giving us $24.25 billion.
But there’s a snag. Everyone – even the top Vegas bookmakers and casino CEOs – admit sports betting in Sin City is not particularly representative of sports betting in the rest of the country. Indeed, it costs quite a lot of money to get to Las Vegas to place your wagers in the first place, dramatically limiting the number of people who opt to place wagers this way. So that $24.25 billion number? If you’re really curious to find out how much money is spent on sports betting by Americans via offshore sportsbooks (and local underground means), the American Gaming Association says to multiply it by about 6.7.
That’s right: Las Vegas, even in processing astronomical handles like the above, only accounts for about 3% of the total US sports betting handle. Thus, we multiply Vegas’ yearly handle of $4.9 billion by 33, giving us $161.7 billion. Of course, there are reputable analysts that claim this figure, too, is too low, doubling or even tripling it when answering the question of how much money the US spends on sports wagering. It’s kind of a moot point, though, as it doesn’t really matter if the US spends $161 billion or $483 billion on sports betting. The only thing that matters from a social economics perspective is that most of that money is being sent underground or overseas, where it isn’t taxed as it would be in the States. By any measure, over the last 25 years or so (from PASPA’s advent to its ultimate demise), the federal and state governments have lost out on trillions of dollars in taxable expenditures. Oops.
Where Does The Sports Betting Money Go
Once you know the answer to “How much money do Americans bet on sports?” the natural follow-up question is: Where does the sports betting money go? Most of this, naturally, goes back to bettors in the form of winnings, but after paying out bettors, the remaining cash – i.e. the house take or vigorish – goes to several different places.
With a legal land-based sportsbook, the house will get its take (between 4% and 6% of the handle, typically), which is then taxed at various rates depending on the state where the sportsbook operates. Gaming taxes are then used to fund state and local programs (usually something to do with “roads” or “education”), which is why many proponents of sports betting view gaming as a way to improve local infrastructure.
At legal offshore sportsbooks that operate outside of US jurisdiction, the distribution is similar, with books retaining about 4%-6% of the handles they process. Bettors get the rest as winnings. However, because that money is sent offshore and often claimed as cryptocurrency, there is no way for the government to comprehensively tax those winnings. It is incumbent on sports bettors to claim their winnings each year as part of their income taxes, but there’s no telling how many do or don’t follow through. Additionally, if you collect your monies in Bitcoin or other cryptocurrencies, you might not convert any of your winnings back to US dollars within any taxable timeframe. In this way, tons of cash falls through the cracks. Also, all the vig that these offshore sportsbooks collect stays offshore, never returning to the US economy in any form, as taxes or otherwise.
Money Spent On Illegal Sports Betting By Americans
Though there is a negative connotation behind the term “illegal sports betting”, it does not deter millions of Americans from betting on their favorite sports. The bottom line is that most of what the US gambling industry describes as “illegal” is, in fact, 100% legal. There are no laws in any state against using offshore sportsbooks, and the sites are so big and so popular that most people already forego engaging with illegal local bookies and black-market sharks to use these trusted, legitimate sports betting sites. Honestly, while analyzing how much money Americans bet on sports is interesting from a mathematical and observational standpoint, the real question is: How much money can you win at a legal online sportsbook? And the answer? A lot!