Over the past few years, legal sports betting has taken hold in the United States and is showing no signs of letting go.
Following the Supreme Court repeal of the ban on sports betting outside of Nevada in 2018, many states are realizing the financial benefits of legalization and taking advantage of a new, steady stream of revenue.
Even though half of the country has gotten involved with sports betting in some way, the industry still has much more room to grow. This is both in the number of states that allow it, and the manner in which it is offered.
Below, we will get deeper into the legal sports betting industry including its historical timeline, where things currently stand, the varying models that are being followed in different states, and what to expect from the industry moving forward.
The federal repeal of PASPA gave states the power to allow wagering, but it didn’t require the implementation of a specific model or lay out a universal blueprint to follow. There’s more than one way to crack an egg, and that sentiment is shared when it comes to sports betting since states have employed a few different methods for the legalization process.
Each state that allows sports betting does so by offering a version of the following: multi-operator mobile betting, single-operator mobile betting, in-person mobile betting, or retail only betting. In many states, more than one of these is available, but we’ll go into more detail below.
If you would like to have a better understanding of how we got here with legal sports betting in the US, it is fully explained below.
One popular example of sports betting in the United States is the multi-operator model, which we’d also refer to as full mobile betting. This involves the state allowing for a certain number of operators, with each one required to pay a hefty one-time licensing fee to the state in addition to a certain percentage of its revenue.
The exact number of betting sites that are licensed varies by state but with multiple operators joining the fray, the public is given a wide range of options to choose from. Many bettors in these states are repeat customers who have accounts with more than one sportsbook, which isn’t a possibility with some of the other templates.
As of early 2021, 11 states employ the multi-operator sports betting model. It should be noted that nearly every state with full mobile betting also allows for gambling at retail locations as well, with Tennessee being one of the major exceptions.
The antithesis of the multi-operator blueprint is this one, which is currently used in Washington D.C. along with New Hampshire, Rhode Island, and Oregon. In all places where the single-operator model is employed, the industry is regulated by the state lottery and a single provider is chosen to offer sports betting to the masses.
Oregon and the District of Columbia have their very own lottery-sponsored apps, while New Hampshire and Rhode Island have a revenue-sharing deal in place with its provider.
This single-operator system does make things pretty simple, as it makes the decision for the bettor as to where to sign up. And having any option for mobile wagering is certainly better than having none at all.
At the same time, it also constructs a monopoly that eliminates the competition embraced by states with multiple sportsbooks to choose from. To this point, the territories that have taken this route are not achieving optimal financial success.
The name sounds like a bit of an oxymoron but once you hear the description, it begins to make a bit more sense. With this model, online betting via mobile application is allowed but only at certain locations, so it isn’t open in the same way that others are.
There are two states that fall into this category. In Montana, bettors must be present at a retail lottery location to wager online. In Mississippi, bettors must physically be on the grounds of the property to place wagers on the sportsbook app.
This saves you a trip to the actual betting window but since you need to be at a specific location, it’s not quite as popular or preferred as other mobile betting models.
It is also worth pointing out that in Nevada and Illinois, bettors can wager from a location of their choice after completing an in-person registration. After the one-time visit to complete the signup process, it offers the same conveniences as full mobile betting. Iowa formerly had this process in place but has graduated to allowing remote signups from anywhere in the state.
The retail-only blueprint is another self-explanatory one and is just another way of saying you can only wager at land-based sportsbooks. This is how Las Vegas thrived for decades and now, there are brick-and-mortar sportsbooks all over the country.
However, it’s only a small group of states that require bettors to wager exclusively in person without mobile wagering attached. Among those are Arkansas, New Mexico, Delaware, and New York, although the latter is scheduled to add mobile betting to its offerings.
We’ve established that there are various ways that a state can go about legalizing sports betting, but which is the best? The answer could be up for interpretation but once the criteria for a successful model is laid out, there is one option that seems to work better than the rest.
Each state legalizing sports betting does so with the same basic intention: to maximize tax revenue. This is especially true in the wake of COVID-19, which forced many states to look for new streams of cash due to financial distress caused by the pandemic.
The way we (and many states) see it, the goal of raking in the most dollars is best accomplished by the mobile betting blueprint that promotes competition among multiple operators. You don’t have to take our word for it either, as the figures really tell the story.
Look no further than New Jersey for the perfect example of an open and competitive mobile betting market being the most profitable.
After leading the charge against PASPA in federal court, the Garden State implemented a model that allows multiple mobile betting operators and promotes competition for customers. The end result? The biggest sports betting market in the country since Las Vegas legalized gambling all those decades ago.
In 2019, the state took $4.5 billion bets while NJ online sports betting accounted for over 80 percent of the handle. The $40 million in new taxes generated for the state was the highest of any state in the country, including Nevada. The trend continued when those figures rose to over $6 billion in handle and around $50 million in tax revenue in the 2020 calendar year despite the pandemic wiping out most sports for several months.
We once again saw how vital the mobile component is, as the number of bets placed on sportsbook apps rose to well over 90 percent. By the end of the year, the public had nearly two dozen operators to choose from.
The next most successful sports betting operation over the past two calendar years is Pennsylvania sports betting. The Keystone State began mobile betting in 2019 and adopted the same model as New Jersey, which stopped its residents from crossing the border to place wagers.
By the end of the year, a dozen mobile sportsbooks were available to the public. As a result, it has enjoyed a financial boom of its own. With help from a high tax rate, the Pennsylvania Gaming Control Board reported almost $39 million in state taxes due in the 2019/20 fiscal year, and that mark may double in the 2020/21 fiscal year.
The end goal is raising tax dollars but that goes hand-in-hand with offering a product that people actually want to use. States like New Jersey and Pennsylvania have proven that making money and a positive customer experience don’t need to be mutually exclusive.
In order to make the most money possible, states also need to offer a high-quality service. This goes a long way toward guaranteeing bettors will wager via legal sportsbooks rather than other outlets.
If the public is unhappy with its options (or lack thereof), the door is open for offshore sites, local bookies, or traveling to another state where betting is offered in a more customer-friendly way. When that takes place, the state isn’t actually maximizing its revenue potential.
The success of states such as New Jersey and Pennsylvania hasn’t gone unnoticed, as there are almost a dozen states who have adopted this blueprint. In neighboring New York, Senator Joseph Addabbo led the push for mobile betting with the same idea in mind.
“It’s a win-win. That is why [New] Jersey prefers that model and Pennsylvania prefers that model and the vast majority of other states that do mobile sports betting prefer that model,” Addabbo explained to BonusSeeker in early 2021. “Because it’s a proven product. It’s a proven winner for the state and for its people.”
The competition created by allowing multiple sportsbooks not only gives the public a huge variety of sportsbook choices, but also lends itself to other amenities. Bettors are able to take advantage of signup offers and a plethora of ongoing promotions that aren’t offered in states where sites don’t have to compete for customers.
As we’ve been able to tell, this has led to financial success and many states have adopted similar procedures.
For every state that has opted for online betting and several sportsbook options, there’s a state that decided to go in another direction. The way we see it, those states are choosing to leave tax money on the table.
States that only allow brick-and-mortar sportsbooks can’t compare when it comes to revenue potential. The same goes for states that only allow in-person mobile on the premises of land-based venues, since much of the convenience of the mobile option is still taken away.
That leaves the single-operator blueprint that generally runs through the state lottery launching its own application or by way of a revenue-sharing model that limits the number of operators that are allowed to offer betting.
A monopoly closes the door to competition, which eliminates many of the bonuses and promotions that bettors enjoy in places like New Jersey, Pennsylvania, Colorado, Indiana, Tennessee, and several other states. It can also affect the odds that players are offered in a negative way since operators know that bettors can’t shop around if there aren’t any other shops.
These are things that could drive bettors toward using other outlets to wager, which negatively impacts how well the state can do financially. Implementation of such a blueprint has already led to buyer’s remorse in at least one state.
“Unfortunately, we have seen a very checkered past for other states that have used this kind of model. The governor in Oregon wants to get away from it,” Addabbo said of Governor Kate Brown’s support for online betting expansion in the Beaver State.
If Governor Brown’s desire to switch to a more competitive model isn’t a major indictment of what Oregon is currently using, what is?
Mobile sports betting is coming to New York, and that is a big deal because it has the potential to turn into the biggest market in the country. But in order for that to happen, the state must offer something of quality, and the aforementioned Addabbo knows that.
“[New York] has the potential of really knocking it out of the ballpark. And we can eclipse not only Nevada, we can eclipse and jump over [New] Jersey in a short period of time. But you’ve got to have a good product. Bottom line.”
The Empire State, which launched retail sportsbooks in 2019, has experienced an ongoing battle surrounding the online betting issue for some time. Addabbo, with the support of the state legislature, has been the most vocal proponent of mobile betting while Governor Andrew Cuomo remained a longtime critic.
Due to the financial crisis exacerbated by the pandemic, however, Cuomo shifted his view and realized the mobile platform could deliver valuable revenue to the state. By the time budget negotiations arrived, there was no longer an argument about ‘if’ New York was going to have mobile betting. The question became ‘how’ the state would do it, leaving the model as the crux of the issue.
The two sides remained at a philosophical impasse throughout 2020 and into this year. Cuomo and legislators finally got together in early 2021 to hammer out a deal. In April, mobile sports betting finally made it into the budget with plans to launch in time for the Super Bowl in February 2022, if not sooner.
As for the model offered, the plan is not quite like anything we’ve seen up to this point.
The goal of Senator Addabbo and Assemblyman Gary Pretlow, another key player in the advocacy for NY online sports betting, was to legalize a fully competitive model mirroring what is available in New Jersey and Pennsylvania.
Their legislation allowed room for up to 14 operators with each of the state’s seven licensed casinos getting two mobile betting skins. Revenue would be generated from taxes and licensing fees, which were set at $12 million for each operator.
Cuomo’s original proposal was based on a single-operator model that was run by the state, as he felt this was the way to generate more revenue. Providers would have to apply for the right to offer mobile sports betting via a request for proposal (RFP). A state to compare this plan to would be New Hampshire, where DraftKings eventually won the right to be the state’s sole provider with a revenue-sharing offer of 51 percent.
The debate between the two models raged into the 11th hour of budget negotiations and what the Empire State ultimately agreed upon wound up being a combination of the two.
“We decided to devise this idea that was a hybrid,” Addabbo explained. “The structure basically is there from the governor, but it’s our language, and I think it’s a good mix.”
The foundation of the plan follows Cuomo’s proposal of a state-run model that limits the number of operators that bettors will have to choose from. With that said, the governor compromised as well, as the language of the legislation allows for multiple providers to be chosen in the RFP process instead of just one.
“A minimum of two providers, and a minimum of four skins. I appreciated the Governor’s office and their willingness to go up because they started out with one provider…but I can foresee more than two providers and I can foresee more than four skins,” Addabbo forecasted. “I think it’s going to be that popular in New York.”
These efforts guarantee that there will not be a monopoly on mobile betting. The public will have options to choose from right off the bat, and there is even room to grow the number of choices offered in the future.
While there won’t be quite as many options as we see in states with the casino-run model featuring multiple operators (New Jersey, Pennsylvania, etc.), competing with other states by giving New Yorkers some variety by making room for multiple providers and skins was a major priority for Addabbo in negotiations.
“Once we got the number of skins increased and then looked at the bill, we saw its flexibility. It allows us to have two or more providers and four or more skins.”
In the end, the Empire State wound up with a hybrid sports betting model that it can call its own. Regardless of how successful it winds up being, it is certainly a case study that many others are keeping their eyes on. New York has the highest population of any state with legal sports betting and how it approaches offering the mobile option to its 19+ million people has the attention of the rest of the country.
“The way we structured it and its flexibility, I think, will bode well for New York. But states are always looking at each other. It’s such a competitive industry and market, I think other states are looking at what neighboring states are doing,” Addabbo said. “I always think there are some states peeking at us all the time. Certainly, this unique model in New York has piqued the interest of many.”
Sports betting began taking off as a result of a few pioneering states being proactive following the repeal of PASPA. But its continued growth is becoming more reactive newcomers follow the footsteps of early entrants into the industry.
In most regions of the country, one state making a move has helped spark a chain reaction that has led to legislative pushes in surrounding states. This is because once a state starts pulling in sports betting revenue, others in the vicinity begin to realize that standing idly by means losing out on dollars.
Let’s look at different examples from all over the United States:
New Jersey emerged early on as the poster child for a successful rollout, as the Garden State has put itself on a pedestal with only Nevada when it comes to betting handle. Part of the reason for its instant success is that the state had two huge markets to bite off pieces of in Pennsylvania and New York.
The former of those found a way to launch sports betting for itself, and Pennsylvania and become a powerhouse in its own right. That’s expected to be the case in New York as well, especially since residents of the Empire State account for 20 percent of the betting handle in New Jersey.
New York is finally acting on the realization that it is missing out on millions in revenue to New Jersey. Following suit looks to be Connecticut and Massachusetts, the latter of which sees many residents travel to New Hampshire to place online bets.
Not long from now, there will be a band of northern states from the Atlantic Ocean deep into the Midwest that all offer sports gambling. Most, if not all, will have mobile betting. It also is beginning to spread south, as Maryland is on the way and Virginia is already live.
Indiana and Iowa legalized sports betting in 2019. Sandwiched between the two is Illinois with its huge population and many different professional and collegiate sports teams. Both of these states did well with their neighbor, especially Indiana due to its proximity to Chicago. Indiana also benefited from bordering with a second huge market in Michigan.
So what did Illinois and Michigan do? They launched sports betting in 2020. Suddenly, Ohio borders four states that allow mobile sports betting. It comes as no surprise that Ohio has been working diligently on a bill that is expected to pass in the near future.
Soon enough, the states in the Midwest will link up with those from the northeast. If things do get going in Ohio, it would create the largest string of connected states in the country with legal betting from New Jersey in the east to Iowa in the west. Until New York, Massachusetts, and Connecticut join the party, that is.
The southern part of the United States tends to be more conservative when it comes to gambling, so it comes as no surprise that things didn’t pick up as quickly in these states. Arkansas and Mississippi got things going with a retail-only model but the real game changer was Tennessee, which borders nine states total, launching mobile betting in 2020.
The impact can already be seen. North Carolina recently went live, albeit in a retail-only capacity. Above that, Virginia sports betting has betting and is connected via West Virginia (and Maryland soon enough) to the northern states with betting. Down below, Georgia’s push for a mobile sports betting bill failed to get into the 2021 budget but is likely to be revived in 2022.
Based on the method that states have chosen to embrace the industry since 2018 and the revenue that has been generated as a result, we are beginning to see some developing patterns.
Legal sports betting in the United States is still somewhat in its infancy but its continued explosion in growth is leading to critical mass, and the results we’ve seen so far allow us to begin drawing conclusions about what’s ahead for this ever-popular industry.
As time goes by, more and more states seem to be catching onto the fact that mobile betting is the route to the most revenue possible. More specifically, mobile betting with multiple operators. And it’s not merely an opinion, as the numbers show that states with online wagering take in more bets than states that don’t.
The following states recorded the highest sports betting handles in 2020: New Jersey, Nevada, Pennsylvania, Illinois, Indiana, Colorado, Iowa, and West Virginia. What do all of those states have in common? Mobile betting and many different sportsbooks for the public to explore.
In each of these states with the exception of Nevada, mobile betting accounts for at least 80 percent of all wagers taken. But even in Nevada’s case, more than half of the wagers are placed via online sportsbooks rather than at the land-based betting window.
As legalized sports gambling has spread rapidly throughout the United States, mobile betting is spreading with it. The over $1.5 billion in revenue that was generated by the industry in 2020 is projected to grow to $6.5 billion according to leading global investment bank Morgan Stanley. The forecast says that online betting will account for a whopping $5 billion, or 77 percent of that.
(Please Note: The statistics referenced earlier from Union Gaming forecasted $8 billion in total revenue. Based on the two projects, we are confident that the total will be somewhere between $6.5 billion and $8 billion with the same percentage of wagers coming from the mobile platform.)
Every industry evolves over time, and sports betting is no different. Initially a land-based venture, sports betting has been revolutionized thanks to the mobile platform. Online betting has led to further evolution in the form of live betting.
Live betting, also known as in-play or in-game betting, is one specific aspect of sports betting that has been on the rise and will undoubtedly continue its upward trend. This can be said with confidence knowing that the growth of live betting is directly correlated to the booming expansion of mobile wagering.
In-play betting is the process of wagering on a game after it’s already begun. As sporting events progress, in-game lines are continuously updating in real time based on the action taking place.
Thanks to mobile sports betting applications, bettors are able to access these ever-changing odds and wager on games at nearly any point from start to finish, with the whole process taking only a few seconds.
Now that more and more states are committing to the mobile betting platform, live betting is becoming widely available and entering the mainstream when it comes to the options offered by sportsbooks. It has also grown into a full-blown strategy for bettors as opposed to merely an option for those who missed the start of a game.
The current sports betting picture shows a landscape that has already experienced major growth and will continue to do so. In total, 22 territories (21 states plus D.C.) have launched sports betting operations in the United States with another six more legalized and waiting to go live albeit in a few different ways.
Below, we provide a bit of information on each state while detailing which category it falls into when it comes to how it offers sports betting. This will help demonstrate which model is the most popular and answer questions about the differences between how different states are operated.
This state was somewhat of a pioneer in the south, as Arkansas sports betting began in July 2019. Wagering is currently limited to a few land-based sportsbooks and it is likely to remain that way, as gambling legislation is not so easy to pass in Arkansas. Efforts to add more casinos have been rebuffed, so mobile betting is out of the question.
Delaware was famously first to ratify the constitution in the 18th century and it’s a pioneer in the gaming world as well. It was the first state outside Nevada to legally accept single-game sports bet back in 2018. Due to its small size, population, and the fact that it doesn’t have an online platform, this market is capped in what it can earn.
Colorado sports betting, both retail and mobile, launched on the very same day in May 2020. Since then, the number of operators has swelled to 15 and nearly all of the state’s wagers are placed online via sportsbook applications.
Illinois’ interesting sports betting journey culminated in 2020 when retail and mobile launched within a couple of months (March and June, respectively). Initially, the required in-person registration was waved via executive order from Governor J.B. Pritzker but as of April 2021, the in-person signup process was restored.
Indiana arrived early to the party, allowing for retail betting in September 2019 and mobile betting in October of that year. The number of operators overseen by the Indiana Gaming Commission has reached double digits and the revenue numbers for 2020 showed huge growth and by the end of the year, revenues were reaching record highs.
The Hawkeye State began accepting wagers in August 2019 but the landscape doesn’t look the same now as it did then. Initially, Iowa required bettors to register in person before being able to place bets online. That is no longer the case, as there are now nearly 20 operators in the Hawkeye State that allow for remote registration, which should only help continue to grow the industry.
The Wolverine State launched retail wagering just as COVID-19 arrived on the scene in early 2020, but the market flourished when Michigan online sports betting came along in January 2021. There were nearly a dozen operators ready and waiting to go live and in the time since, Michigan has shown its potential to be one of the biggest gaming markets in the United States.
Based on pre-existing laws, retail betting became legal in Mississippi once PASPA was struck down and sportsbooks began taking bets in August 2018. Overseen by the Mississippi Gaming Commission, mobile betting is allowed in the state but only when physically on the property of a licensed casino.
Overseen by the state lottery, Montana launched sports betting operations in March 2020 in a different way than most. It’s a hybrid model that allows for mobile betting with the Sports Bet Montana app, but only on the premises of a licensed retail outlet. There are over 1,800 retail lottery outlets and kiosks stationed around Big Sky Country
In many ways, Nevada remains the cream of the sports betting crop. It’s certainly the barometer for brick-and-mortar sports betting and despite its reputation being built on land-based venues, Nevada was even the first to launch a mobile betting application and now there are over a dozen available.
With that said, Nevada’s issue with the online platform is its requirement for in-person registration. This is a similar restriction to what Iowa had in place for a time. It is widely thought, and the evidence bears this out, that a remote betting platform similar to New Jersey and others could make it even more lucrative than it already is.
New Hampshire sports betting is regulated by the lottery but the state’s lone operator is a giant in DraftKings, which won the sweepstakes by offering a 51 percent revenue share. The state actually allowed for online wagering before a brick-and-mortar sportsbook opened, which is the reverse of how things usually go.
New Jersey launched retail betting just days after the PASPA repeal in June 2018. A couple of months later, it was one of the first to go live with a mobile platform and it led to the financial boom that has since followed in the Garden State.
In its first full year allowing sports betting, operators took in over $4.5 billion in bets and the industry produced around $36.5 million in tax revenue for the state. Despite many sports being on hiatus for several months, that number jumped to over $65 million in 2020.
Due to its success, New Jersey is looked at by many as a sort of poster child for how to launch sports betting. This is especially true for the mobile platform, which produces the bulk of the revenue.
Interestingly, there has never been a bill passed for gaming in New Mexico. Instead, Native American tribes determined that wagering at tribal casinos would be legal under current compacts between the state and tribes. It has been this way since 2018 and isn’t likely to change anytime soon.
New York launched retail sports betting in 2019, but only at four upstate tribal casinos. Legislators and the governor’s office remained on opposite sides of the mobile betting issue in the time since but following the huge financial toll the COVID-19 pandemic took on the state, a deal for mobile was agreed upon in April 2021.
Uncertainty about the betting model that would be employed in New York led to a standoff between the governor’s plan for a single-operator monopoly run by the state and Senator Addabbo’s proposal for a competitive market that mirrors New Jersey. In the end, a hybrid was developed with elements of both plans.
Due to its population and its many teams, New York has the chance to be the biggest sports betting market in the country. The goal for launch is September 2021 but it could take until early in 2022 to get things going.
North Carolina is the most recent entrant into the sports betting industry after going live in March 2021. Unfortunately for its residents, the Tar Heel State went the retail-only route. To make matters worse, the two tribal casinos that offer wagering are in the far western part of the state, away from population centers in Charlotte, Raleigh, Greensboro, and Durham.
Based on Oregon’s existing laws, the repeal of PAPSA immediately made betting legal in the state but retail came in August of 2019 and mobile arrived in October. Not only is betting overseen by the lottery but in this case, the lottery has its very own application.
Since the ScoreBoard app is a state-run operation, there is no tax rate, but not everyone is thrilled with the venture. In early 2021, Governor Kate Brown backed legislation that would make Oregon a competitive market with multiple operators.
The Keystone State began taking wagers in November 2018 and the first mobile apps launched in May 2019. Before that, many residents were crossing the border into New Jersey to place bets.
Once it got in on the action for itself, Pennsylvania became one of the most successful markets in the country to this point due to its huge population and its many well-known sports teams. Operators are forced to pay a pretty exorbitant tax rate, but the product has remained strong and it’s led to financial success for the state.
Rhode Island was quick to the draw, accepting retail wagers starting in November 2018 and adding mobile betting in time for the 2019 NFL season. The lottery runs sports betting in the Ocean State, and the sole operator is the world-renowned William Hill. The revenue-sharing model that was agreed to gives the state 51 percent while tech supplier IGT gets 32 percent and William Hill gets 17 percent.
Tennessee sports betting holds the distinction as the first state to launch mobile sports betting without retail wagering attached. In most states, land-based betting launched at the same time or before the mobile platform.
It went live in November 2020 and has enjoyed some success, partially due to the fact that none of the nine states that it borders offer mobile betting (though several have launched retail operations).
Another interesting thing about the Volunteer State is that betting runs through the lottery, but there are still multiple options. In other cases (which we’ll get to below), lottery-based models only allow for one operator.
The process of legalization was a quick one in Virginia compared to other states and things went live in January 2021. As Tennessee did, Virginia launched mobile betting without any retail wagering available in the state, and the number of operators is expected to continue growing.
In the nation’s capital, the D.C. Lottery oversees betting and its sole betting site, the GambetDC app. The application launched in May 2020, as did a land-based sportsbook in Capital One Arena, home to the Washington Wizards and Capitals.
In December 2020, William Hill launched an app but the heavy restrictions placed on wagering still make this a single-operator model for the most part. In order to use the William Hill app, bettors must be in a two-block radius of Capital One Arena. Throughout most of the district, GambetDC is the only option.
West Virginia was one of the early arrivals, allowing retail in August 2018 and mobile the following year. After some early trouble with the very first application that launched, the West Virginia Lottery has things under control and offers several options to bettors in the Mountain State.
Even though sports betting legalization has been rapidly spreading around the United States over the past several years, the industry is still in its infancy in this country as states continue to enter the fold.
In some states, sports betting has already been signed into law but are waiting for an official launch. In other places, bills are making their way through the legislature. Some are closer than others but one thing all these states have in common is that they are all moving in the direction toward legalizing the industry in one form or another.
Below, we discuss few states that have legalized sports betting and are waiting in the on-deck circle to launch:
Voters in South Dakota opted for legalized sports betting during the 2020 election and just a few months later, Governor Kristi Noem signed Senate Bill 44 into law in March 2021. The state is expected to officially launch operations by September.
Bettors will need to register in person in Deadwood, then they will be allowed to place wagers on the premises of casinos in the city. It is possible that the restrictive rules on sports betting will lead to many South Dakotans traveling south into Iowa to wager, but it is still a step in the right direction.
The Arizona Senate passed a sports betting bill in April 2021 and just a few days later, Governor Doug Ducey signed it into law. The legislation includes both retail and mobile sports betting with up to 20 licenses up for grabs, with 10 being awarded to professional sports franchises and venues. The hope is that operations will commence by the time the 2021 NFL season arrives in September.
After one bill narrowly made it through the house, the Wyoming senate overwhelmingly passed an amended mobile sports betting bill in March 2021. The two chambers were forced to work out the slight differences and pass identical versions, and the result was Governor Mark Gordon signing sports betting into law in April.
Wyoming became the first state to legalize sports betting in 2021 and the second state along with Tennessee with a market exclusive to mobile sports betting, and this bill’s passage could go a long way toward the eventual legalization in other conservative states.
Other states to keep an eye on in terms of sports betting legislation includes but is not limited to:
To better understand where we are, it helps to know where we’ve been, so we’ll start way back in 1949 when Nevada legalized sports betting. In short order, Las Vegas became the center of the sports betting universe and the industry serving as a major source of revenue for the federal government.
Outside of Nevada, however, organized crime controlled the industry. This led to federal legislation in the 1960s and 1970s, beginning with the Wire Act in 1961, which was aimed at breaking the criminal grip on sports betting and maintaining integrity in professional and collegiate sports leagues.
These laws remained in place through the 1980s until a push for additional legislation to eliminate wagering emerged in response to high-profile scandals related to sports betting. In 1992, congress dropped the hammer on sports betting in the form of the Professional and Amateur Sports Protection Act (PASPA).
Simply put, this legislation banned all single-game betting in the United States outside of Nevada. For the next two decades, things were quiet on the legal sports gambling front. Delaware tried unsuccessfully chipping away at PASPA in 2009 but once New Jersey took on the cause, the federal ban’s foundation began to crack.
Spearheaded by New Jersey Senator Ray Lesniak, the Garden State passed a referendum in 2011 that legalized betting at racetracks and Atlantic City casinos. Sadly, this never got off the ground due to persevering opposition from the NCAA and professional sports leagues and was squashed in 2013.
After several losses at the federal level over the next couple of years, the Supreme Court finally agrees to take on New Jersey’s case against the constitutionality of PASPA. This takes place in 2017 and comes after the state appealed to SCOTUS following a Third Circuit decision to side with the leagues. At this point, the tide began to turn.
In May 2018, the Supreme Court ruled in favor of New Jersey and struck down PASPA in a momentous day for the industry. The repeal of the federal ban allowed sports betting to be offered not only in the Garden State, but any other state outside of Nevada that wants to legalize. New Jersey cracked open a door that has since been kicked in over several years.
States instantly began legalizing single-game sports betting with West Virginia, New Jersey, and Rhode Island being the first states outside of Nevada to accept wagers. Unsurprisingly, New Jersey was the first state to launch a mobile sports betting application, as DraftKings went live there in August 2018.
Every year since has seen more and more states join the fray and by 2024, nearly every state in the country is likely to have some form of legal wagering. At the time of writing, nearly half of the United States has legalized sports betting in some form. In total, 21 states (plus Washington D.C.) are live with six more having passed legislation and waiting to launch.
Another 13 states have active legislation, bills that have been pre-filed, or a constitutional amendment passed by its voters. That means 80 percent of the country has already made a move toward sports betting while several of the remaining states have attempted but failed to get things off the ground.
The emergence of mobile betting has added extra layers to the conversation. No longer was sports betting a simple yes or no decision, as states had to also decide exactly how to go about regulating the industry if they were going to join.
Each state now needs to ask itself: which sports betting model are we going to choose? Are we going to allow mobile sports betting? Will it be retail only? Something in between the two? There isn’t just one answer to these questions and states have responded to the repeal of the federal ban by taking several different routes.
Three years removed from the federal repeal of PASPA, legalized sports betting is sweeping across the country and its expansion is sure to continue.
With that said, not all states that have launched betting are in a position to receive the optimal financial results as the industry continues its rapid growth. Much is made of whether or not a state allows sports betting, but how exactly it is offered (e.g., the model used) is seldom discussed.
Even though the sports betting picture in the United States is still taking shape, enough has happened to teach us a few lessons about what works and what doesn’t. For the sake of the industry and bettors across the U.S., the hope is that more states pass legislation that allows for mobile betting and multiple operators to maximize the true potential of sports betting.