How Much Money Do Americans Bet On Sports?
If you’re a sports bettor, chances are good that you want to know how big the US betting industry actually is. But when it comes to finding out how much money Americans bet on sports each year, you won’t really get a solid or accurate picture by doing a quick Internet search. After all, only legal land-based and domestic online sports wagering is actually tracked and tabulated. The vast majority of betting, of course, is handled by black market vendors and legal offshore sportsbooks (neither of whom are compelled to divulge their numbers). Considering that there are only a limited number of legal sports betting options in the US, their 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 merely 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).
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 much money each gambler wagers on sports (or would wager on sports, given reasonable proximity to a sportsbook). This per capita method is an inexact exercise, and the margin of error is obviously going to be huge. But at least it gives us something to work off of.
How Much Money Is Bet On Sports In Nevada?
Nevada is the gambling capital of the United States and was the only state that was granted a full grandfather exception to the Professional and Amateur Sports Protection Act (PASPA) of 1992. Using savvy marketing of its crown jewel, Las Vegas, Nevada became the number one gambling tourism destination in the world. Even in the wake of PASPA’s repeal and the opening of the sports betting industry to new competitors, Nevada remains the nation’s leader in both betting handle and revenue. Monthly betting handle routinely tops half a billion dollars, and major events like the Super Bowl, Olympics, and NCAA Men’s Basketball Tournament frequently break financial records. Despite concerns from Nevada casinos about decreasing business in the post-PASPA era, 2019 actually represented a 6.2% increase in total handle over 2018.
In 2019, Nevada handled a total of $5.32 billion in sports bets. Most of this money is being bet by tourists who fly in from all around the world to play at Las Vegas’s famous casinos. In 2018, the most recent year with available data, 42.12 million people visited Las Vegas. If we add that figure to the state’s population of 3.03 million, we get a per-capita betting handle of $117.81. If we focus on only sports fans, statistically making up 60% of the American population, that number jumps to $194.79.
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 impossible to know exactly how much money is bet on sports in all other states, the legal states have all started releasing their monthly numbers. Acting immediately after PASPA was eliminated, eight states (NV, 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. By mid-2019, Arkansas opened its first sportsbook, as well. For 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 in many cases, we have taken the monthly averages for all states with legal sports betting 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 (and as online wagering rolls out on a state-by-state basis).
How Is So Much Money Bet On Sports?
Sports betting is a popular hobby throughout the country but as each state moves forward with its legalization and launch, it becomes clearer just exactly how many Americans bet on sports. Sports betting is seen to be a $150 billion industry and this is assumed to be a conservative estimate. Once PASPA was overturned and state sports betting laws were passed, the industry was brought out of the black market and into the limelight. Roughly 50% of US residents are projected to live in a state that has launched legal sports betting by the year 2024. As of now, over a quarter of US residents live in a legal sports betting state and this number is expected to rapidly jump if and when one or all of the three most-populated states (California, Texas, Florida) legalize their industry.
Is Nevada Or New Jersey The Sports Betting Leader?
Nevada remains king for now, but New Jersey made a surprising push to become America’s biggest state for sports betting in 2019. Nevada still holds its lead after closing 2019 with $5.32 billion in total betting handle, but New Jersey managed to close with $4.58 billion in its first full calendar year of operation—only 14% less than Nevada and over $3 billion more than the next closest state (Pennsylvania). Even more impressively, New Jersey handled more bets than Nevada in three individual months: May, July and August. With even a fraction of its 2019 growth, New Jersey could surpass Nevada in total betting handle in 2020.
Much like Nevada with Las Vegas, New Jersey has a built-in market advantage with the world-famous casino town of Atlantic City. Tens of millions of tourists visit Atlantic City every year, and New Jersey has done everything in its power to market sports betting to people outside the state. Besides Atlantic City, online betting has also been incredibly popular. Roughly 85% of statewide sports bets are placed online. Much of this traffic traces to New York City residents crossing state borders to place bets on their phones. One representative of FanDuel, owners of New Jersey’s largest online sportsbook, estimated that the majority of the accounts wagering in New Jersey were registered to addresses in New York,
How Much Money Is Bet On The NFL & College Football?
Football is no doubt the most popular betting sport in the United States. American football comprises nearly $100 billion in total money wagered at offshore sportsbooks. While the country is still legalizing across many states, we are already seeing football become well over two-thirds of some state’s entire industry. As the NFL is the most popular sport in the country, it is no surprise that it is also the most wagered on sport as well, however wagering on college football is no slouch either especially since the advent of the college football playoff system. The NBA, MLB, and NHL are believed to bring in between around $75 billion, which shows just how much of the sports betting pie that football is responsible for.
Which Sportsbook Takes In The Most Sports Betting Money?
When it comes to the real money betting sites, the offshore books rarely release their information regarding their betting handle and revenue. However, when looking at state-licensed sportsbooks, it seems that FanDuel Sportsbook is the strong leader amongst the country’s sportsbooks. In New Jersey, their betting handle and revenue is nearly half of the entire market through both their retail and online sports betting platform. Similar betting handle and revenue numbers are represented for FanDuel in Pennsylvania, as their online platform took off instantly after the launch. William Hill is also another top-dog, as their presence extends to a heavy majority of the legal sports betting states.
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State Sports Betting Revenues
Please note that depending on the reporting standards of each state’s gaming commission, these figures may be incomplete or up to a month behind. The most current numbers as published by each state’s linked gaming commission have been used in each case and are accurate as of the end of January. The numbers for states with vendor fees paid out by the state (as in DE) are listed minus those vendor fees. Handle projections for 2020 are based on a formula that compares available 2020 financial against the average weight of the same month(s) in Nevada’s financial data. Revenue projections are 6.86% of the total projected handle, because that is the national average for hold rate.
Note: With so many leagues temporarily suspended to deal with the COVID-19 pandemic, sports betting revenues in March, April, and May will be severely reduced. There is no data to properly predict this situation because it is entirely unprecedented. The projections here will make several assumptions:
- An 80% reduction in March betting: Although there was some basketball postseason play, sportsbooks lost out on both college basketball conference tournaments and March Madness, along with 19 days of NBA play.
- 90% reduction in April betting: Many sportsbooks have gotten creative with few sports to bet on, but many more have had to shut their doors entirely. The MLS recently announced that it would pushing back the return of its season to May 10, and MLB likewise announced that it would not begin its season until May.
- 30% reduction in May betting: Most sports organizations expect to be back up and running in May, but an adjustment period for sportsbooks is reasonable to expect.
For a more detailed month-by-month overview of sports betting revenue, check out the Legal Sports Betting Revenue Tracker.
* New Mexico sports wagering is only available at a pair of tribal venues, and they are not bound to report earnings to the state on a monthly basis. As such, there is no official data describing the sports betting numbers in the state to date.
** Arkansas took its first sports bets on July 1, 2019. No financial data has yet been released by the Arkansas Racing Commission.
*** Oregon does not publicly disclose sports betting financial data, but representatives did send out a press release with their updated projections for the fiscal year.
How Many Americans Are Betting On Sports?
In 2012, ESPN conducted a poll using a Connecticut-based research firm called Markitecture in which half of all respondents over the age of 16 stated that they had gambled on sports within the last year. At the time, this would have represented 118 million people, and with population growth from 2012 to 2020 that estimate would increase to 123.7 million people. The sample is far from perfect, encompassing only 1,148 respondents for an industry serving hundreds of millions, but it does at least allow us a general sense of how popular sports betting is. With more states legalizing sports betting every year, the percentage of Americans betting on sports will likely increase every year as well.
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 ($118.71), giving us $23.5 billion as a total.
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 $23.5 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 $5 billion by 33, giving us $165 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 $165 billion or $495 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 legal sports betting 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. Trillions. With a “T”.
Where Does The Sports Betting Money Go
Once you know the answer to the amount of money wagered on sports in the U.S., 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. After paying the winners, 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 many of the leading legal online 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 specific 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 By Americans On Unregulated Sports Betting
Though there is a negative connotation behind the term “black market 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 unlawful 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 unlicensed 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!