Sports betting is sweeping the nation, and states are cashing in without breaking a sweat. Since the US Supreme Court lifted the federal ban on betting in 2018, legalized sports betting has become a major source of tax revenue for many states. Eager to capitalize on this opportunity, states have embraced gambling to enhance their budgets without raising taxes, funneling this new revenue into public projects, education, and more. However, the way states allocate these funds reveals a story of varying priorities and some surprising insights.

• From Q2 2023 to Q1 2024, states collected $2.7B in sports betting tax revenue, but less than 2% went to problem gambling programs and support services.
• Currently, 38 states permit sports betting, and projections indicate that Americans are expected to lose over $14B on these bets in 2024.

Rolling the dice on regulation: The industry’s ambitions don’t stop at sports betting. The next strategic push is toward legalizing iGaming, a form of mobile betting that allows gambling on casino-style games around the clock. Currently, only seven states permit iGaming, with just two more expected to join in the next five years. However, growing resistance due to rising addiction risks, increased bankruptcies, and job losses is a concern. Eilers’ Chris Krafcik warned, “US online casino expansion has been hard, and it’s getting a lot, lot harder.”