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?
As the gambling capital 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 2018, 42.12 million gamblers visited Sin City. Among those visitors, the NGCB indicates that NV sportsbooks cleared at least $300 million in revenue at an average 6% house take. This equates to roughly $5 billion in annual handle. Divided by the number of visitors (42.12 million), you get $118.71 of handle for 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 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).
State Sports Betting Revenues Current As Of Q3 2019
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 middle of October 2019. The numbers for states with vendor fees paid out by the state (as in DE) are listed minus those vendor fees. Also, note that projected fiscal years are based on average quarters and do not consider different sports seasons and their summary book volume changes. All this means that the following numbers will trend lower than they are likely to be in reality. In other words, these are conservative estimates.
September: $445.6 million handle, $37.9 million revenue (8.5%)
Year-to-date: $3.0 billion handle, $190.6 million revenue (6.41%)
Projected fiscal year: $3.2 billion handle, $192 million revenue
September: $23.6 million handle, $3.6 million revenue (15.34%)
Year-to-date: $123.1 million handle, $11.3 million revenue (9.15%)
Projected fiscal year: $160 million handle, $9.6 million revenue
August: $19.9 million handle, $2.9 million revenue (14.51%)
Year-to-date: $177.8 million handle, $19.3 million revenue (10.83%)
Projected fiscal year: $375 million handle, $22.5 million revenue
August: $109.0 million handle, $9.9 million revenue (9.07%)
Year-to-date: $395.4 million handle, $35.3 million revenue (8.91%)
Projected fiscal year: $395 million handle, $23.7 million revenue
* 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. The first batch of revenue data will be included when it is released by the Arkansas Racing Commission.
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 via state-regulated channels. 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 “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. 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 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 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 On Illegal Sports Betting By Americans
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!