- COVID-19 has created an estimated $615 billion hole in state budgets through public health expenses and lost tax revenues.
- Many states have turned to sports betting odds as one potential avenue to mitigate the economic losses caused by COVID-19.
- Since the near start of the pandemic, U.S. sportsbooks have handled over $1 billion in wagers and earned over $82 million in revenue.
LAS VEGAS – States are facing a mounting budget deficit after the economic havoc caused by the COVID-19 pandemic, and many states are considering sports betting as a potential way to address that deficit.
The Center on Budget and Policy Priorities estimates that COVID-19 will have a $615 billion impact on state budgets during the 2020 fiscal year. The data backs that up so far, as state governments have laid off or furloughed over 1.5 million workers since the start of the pandemic.
The economic losses have been staggering, but sports betting has emerged as a lucrative industry that, if supported properly, can massively supplement state budgets.
The Supreme Court’s decision to overturn PASPA back in March 2018 allowed all states to pass their own legislation regarding legal sports betting.
Some states are restricted against doing so by language in their Constitution or state Charter, but most can legalize sports betting whenever legislators choose.
The pandemic has created a strong financial incentive and a sense of urgency to legalize sports betting, which is evident in the sports betting bills passed by Washington and Virginia, as well as the new tribal gaming compacts negotiated in Oklahoma.
Expect several more states to legalize sports betting before the end of 2020 and to work to ensure that the process of launching their first sportsbooks is as fast and seamless as possible.
How Much Money Can Sports Betting Generate?
The pandemic has wreaked havoc on the world of sports as well as the broader economy. Popular sports leagues throughout the U.S. have heavily altered their scheduling or even canceled games entirely, which will make it difficult to accurately predict the economic impact of sports betting.
Even with all the ongoing uncertainty and the lack of popular North American sports leagues to bet on, U.S. sportsbooks have generated a sizable amount of revenue primarily through mobile betting.
Since March, state-licensed sportsbooks have earned over $82.5 million on over $1 billion in total wagers. And those figures do not take Nevada into account because Nevada has redacted their sports betting revenue figures for the past two months.
Handle and revenue figures should increase dramatically in July in August as the NBA, MLB, and MLS all return to play and casinos begin to slowly reopen under revised safety guidelines.
In a healthy economy, state-licensed sportsbooks would likely have handled about $15-20 billion in wagers in 2020 and collected between $1 billion and $1.4 billion in revenue.
States earn hundreds of millions of dollars by taxing that revenue, and many states also collecting taxes from players’ gambling winnings as well, so even if the sportsbook isn’t winning, the state is.
All these factors should act as a heavy incentive for more states to legalize sports betting to help combat the economic and budgetary crisis created by COVID-19.
With a dual background in English and sports performance and business analytics, Carter aims to write stories that both engage and inform the reader. He prides himself on his ability to interweave empirical data and traditional narrative storytelling. When he isn’t keeping readers up to date on the latest sports betting legal news, he’s banging his head against a wall regretting his decision to be a Tampa Bay Buccaneers fan.