Government

Sports betting revenue could hit $3.1 billion this year

States see funds as one means to help pandemic-hit budgets

Football fans wait for kickoff in the sports betting lounge at the Ocean Casino Resort in Atlantic City, N.J., in 2018.
Football fans wait for kickoff in the sports betting lounge at the Ocean Casino Resort in Atlantic City, N.J., in 2018. (Associated Press)

On a day when New York’s governor did an about-face and embraced mobile sports betting as a way to deal with financial losses stemming from the coronavirus pandemic, a company that tracks gambling legislation and performance predicted that revenue from legal sports betting could reach $3.1 billion in 2021 and as much as $10 billion within five years.

VIXIO GamblingCompliance issued a report Wednesday projecting that at least six and as many as 14 additional states will legalize or expand sports betting in 2021.

That fits with projections by numerous analysts that nearly half the country may have legalized sports betting by the end of this year.

The company estimated that revenue from sports betting would reach $2.6 billion to $3.1 billion this year — an increase of as much as 100 percent over the $1.55 billion it estimates will have been generated from sports betting in 2020.

December figures have not yet been reported from most states.

Sports betting revenue represents money remaining after sportsbooks pay off winning bets and other expenses.

It is separate from — and much less than — the total amount wagered on sports, which is called “handle.”

States collect taxes on the amount of money their sportsbooks retain from sports betting, not on the total amount wagered.

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The report came as New York Gov. Andrew Cuomo reversed his long-held opposition to mobile sports betting, opening the possibility of a lucrative new market in one of the nation’s most populous states.

It also could take a big bite out of New Jersey’s leading position in the national sports betting market. About 20 percent of New Jersey’s sports bets are placed by New Yorkers crossing the state line.

New York, as with most states, expects to have a smoking crater where its budget used to be due to the economic impact of the pandemic.

That is expected to play a large part in additional states considering or enacting sports betting legislation this year.

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