Mobile sports betting is booming in some states, while others are shrinking
The stakes are higher this year in Ohio for March Madness — and not just because it’s a regional host for the first round of the NCAA Men’s Basketball Tournament.
For the first time, Ohio sports fans can click on a mobile app or use kiosks in bars, restaurants or supermarkets and legally bet on the famous tournament.
Kansas and Massachusetts are also new additions to the world of online sports betting since the last tip of the NCAA tournament. A total of 33 states and the District of Columbia now offer at least some form of sports betting – each seeking shares of a multibillion-dollar company that expanded rapidly after the US Supreme Court allowed it almost five years ago.
Ohio got off to a booming start when it launched sports betting in January. Ohio gamblers wagered more than $1.1 billion in the first month, bringing in more than $20 million in state tax revenue. That almost tripled the amount of revenue that legislative analysts had predicted for the entire first six months of the operation. But no one blames them for missing the mark.
“They couldn’t have known how big of a market we were going to get on day one,” said Jessica Franks, director of communications with the Ohio Casino Control Commission.
While some states started with limited in-person sports betting and gradually added mobile apps, Ohio started more aggressively, launching numerous mobile options and retail locations at the same time. Republican Gov. Mike DeWine is now proposing to double the tax rate on sports betting.
New York began to allow sports betting in 2019, but only in person at four casinos across the state, limiting the market. Betting boomed when the state began allowing people to place sports bets via mobile phones and computers in January 2022. More than $1.6 billion was wagered in the first month through online sports betting, compared to just $15 million through in-person sports betting in casinos.
New York imposes a 51% tax on mobile sports betting revenue — a much higher rate than other states — with most of the revenue going to education. Budget officials originally predicted that mobile sports betting would generate $357 million in state tax revenue for fiscal year 2023, which ends March 31. Gamblers blew that away. Through February, mobile sports betting had generated $661 million in tax revenue for education.
State Senator Joseph Addabbo Jr., who championed sports betting as chairman of the Senate Racing, Gaming and Wagering Committee, said even he is surprised by the results.
“There is certainly a need for sports betting with a mobile device,” said Addabbo.
New York and Ohio both have large populations and multiple professional sports teams to drive interest in sports betting.
Arkansas, a much smaller state with no major league sports teams, began in-person sports betting at casinos in July 2019. It really took off last year when it launched mobile sports betting. State figures show that nearly $3 million has been wagered on the Super Bowl this year — more than three times the annual amount before mobile betting was allowed.
State officials expect people from neighboring states to cross Arkansas to bet on March Madness.
“We’ll be surprised if March doesn’t set a new monthly record for sports betting in the state,” said Scott Hardin, spokesman for the Arkansas Department of Finance and Administration.
Other states have also beat expectations for sports betting revenue.
Indiana’s sports betting tax exceeded $31 million in fiscal 2022 — far above the $12 million forecast when lawmakers approved it in 2019. New Hampshire’s nearly $24 million tax receipts from sports betting easily doubled the original forecast for fiscal year 2022.
But not every state bank as much money as expected from sports betting.
Legislative analysts in Montana, which only allow sports betting through online networks in bars and casinos, had expected $79 million in bets placed last fiscal year, generating $4.8 million in state tax revenue. The actual results were about half that — $2.4 million in state tax revenue from about $45 million in sports betting.
Connecticut received less than $20 million in sports betting taxes in the first 16 months since betting began in October 2021. Legislative analysts had estimated $21 million in the first full fiscal year.
Legal sports betting across the country has generated more than $3 billion in state and federal taxes since the 2018 Supreme Court ruling authorized it, according to the American Gaming Association. It produces about a quarter of what could eventually be expected from a fully mature market.
The sports betting debate has shifted from “Is this something we should consider?” to “How should we do this in a way that best serves our constituency?” said Casey Clark, the association’s senior vice president.
The prospects for sports betting to expand to more states this year appear mixed.
A bill legalizing sports betting has passed the Kentucky House and went to the Senate on Wednesday but still faces a high hurdle. Similar bills have died in the Senate in the past, and this year’s version would need three-fifths of the vote to pass.
Supporters are also making another run at a Minnesota sports betting account and several other states.
In Missouri, efforts to allow sports betting have stalled in the Senate over whether they should be tied to rules for slot machine-style games popping up in convenience stores.
In Georgia, sports betting bills have stalled amid debates over whether a constitutional amendment is needed, how to spend the potential tax revenue, and whether to link sports betting with the legalization of casinos and horse racing tracks.
The three most populous states – California, Texas and Florida – are all currently lacking in online sports betting. Florida’s Seminole tribe, which was granted exclusive state rights to conduct sports betting, shut down its online app in December 2021 after federal courts ruled it violated a rule requiring people to be physically present on tribal land when betting.
After the costliest ballot battle in US history, California voters rejected a pair of rival sports betting initiatives last November supported by Indian tribes and the gambling industry. Supporters will likely try again, although it’s unclear when that will happen.
Lieb reported from Jefferson City, Mo. Associated Press writers Jeff Amy in Atlanta; Tom Davies at Indianapolis; Andrew DeMillo in Little Rock, Ark.; Brendan Farrington in Tallahassee, Florida; Susan Haigh in Hartford, Connecticut; Amy Beth Hanson in Helena, Mont.; Steve Karnowski in St. Paul, Minnesota; Maysoon Khan in Albany, NY; Holly Ramer in Concord, NH; Bruce Schreiner in Frankfort, Kentucky; and Julie Carr Smyth in Columbus, Ohio, contributed to this report.