Americans bet $125B on sports in 4 years since legalization

ATLANTIC CITY, N.J. » Americans have bet more than $125 billion on sports with legal gambling outlets in the four years since a U.S. Supreme Court ruling cleared the way for all 50 states to offer it.

On Saturday’s anniversary of the decision in a case brought by New Jersey, two-thirds of the states in the country have legalized sports betting.

In just four years, the industry has worked itself into the daily lives of millions of Americans — from those who plunk down money hoping for a certain outcome to those who watch TV broadcasts with odds calculations to those struggling with gambling problems.

You don’t have to be a gambler — or even a sports fan — to be affected: The industry tsunami of advertising is practically impossible to avoid, particularly on TV and radio but in other media as well. For example, FanDuel is the official odds provider for The Associated Press.

On May 14, 2018, the Supreme Court decided a case that had begun 10 years earlier in New Jersey as the longest of long shots: a bid to overturn a federal law, the Professional and Amateur Sports Protection Act, that restricted sports betting to just four states that met a 1991 deadline to legalize it. Ray Lesniak, the now-retired state senator who filed the first lawsuit against the federal government over the issue, said he acted to provide money for states, protection for consumers and to attract experienced European betting companies to expand to the U.S. — all of which he said have come to pass.

“I made a good bet for New Jersey and for America,” he said, metaphorically speaking. (Lesniak also placed the first winning legal sports bet in his state, correctly picking France to win soccer’s World Cup, winning $400 on a $50 bet at 8-to-1 odds.)

“When PASPA was repealed, I don’t think any of us would have expected how big the (industry) would be just four short years later,” said Karol Corcoran, general manager of FanDuel’s online sportsbook.

DraftKings president and co-founder Matt Kalish said: “I got into this industry because I was always the kind of kid who liked to predict things, to compete with my friends and make predictions. For people that like to do that, sports betting has become far and away the No. 1 thing.”

To comprehend just how much $125 billion is, consider this: It’s a bit more than the amount that was spent on pet food, supplies and veterinary care in the entire country last year, and more than the net income for America’s farmers last year.

Of course, much of that money was paid out to people who won bets. After expenses, the sportsbooks generally keep less than 10% of the total amount of bets they handle. Over the first four years of legal betting, their revenue figure is $8.8 billion, according to the American Gaming Association, the gambling industry’s national trade group. A major rationale for the push to legalize sports betting was to protect customers from being victimized by unlicensed bookmakers, many operating as part of organized crime. State regulations include robust consumer protections, with watchdog regulators ready to pounce when they see violations.

But making sports betting legal has not succeeded in wiping out illegal gambling. Just look at any of the numerous sports betting Facebook groups, where unlicensed books in other countries tout their offerings; one aggrieved bettor complained Wednesday that after he won a big bet, he asked his bookie to pay him, only to have the man disappear.

Sports betting has been, and still is, pitched to state lawmakers as a source of new tax revenue, a particularly tempting option in trying financial times. It has generated $1.3 billion in state and local taxes since 2018 according to the AGA, but the amount many states keep is a mere drop in the bucket compared with their overall budget. Some states, like New York, tax mobile sports betting revenue at 51% — a rate that operators say is not sustainable in the long run.