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Mobile sports bets booming in some states as others shy away

States with mobile betting appear to be banking bigger bucks than those that allow only in-person sports wagers.
Person show a receipt after placing a sports bet on a mobile device.
Posted at 3:03 PM, Mar 16, 2023

The stakes are higher in Ohio this year for March Madness — and not just because it's a regional host for the first round of the men's NCAA basketball tournament.

For the first time, Ohio sports fans can click on a mobile app or tap into kiosks at bars, restaurants or grocery stores and legally bet on the famed tournament.

Kansas, Massachusetts and Maryland also are new additions to the world of online sports betting since the NCAA tournament last tipped off. A total of 33 states and the District of Columbia now offer at least some form of sports wagering — each scrambling for shares of a multibillion-dollar enterprise that has rapidly expanded after the U.S. Supreme Court allowed it nearly five years ago.

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Ohio got off to a booming start when it launched sports betting in January. In its first month, Ohio bettors wagered more than $1.1 billion, generating more than $20 million in state tax revenue. That nearly tripled the revenue amount that legislative analysts had projected for the entire first six months of operation. 

Whereas some states started with limited in-person sports betting and gradually added mobile apps, Ohio began more aggressively — simultaneously launching numerous mobile options and retail locations. Republican Gov. Mike DeWine is now proposing to double the tax rate on sports betting.

New York began allowing sports betting in 2019, but only in person at four upstate casinos, limiting the market. Betting boomed when the state began allowing people to make sports bets through cell phones and computers in January 2022. In the first month, more than $1.6 billion was wagered through online sports betting, compared to just $15 million through in-person sports bets at casinos.

New York charges a 51% tax on revenue from mobile sports betting — a far higher rate than other states — with most revenue going to education. Budget officials originally projected that mobile sports betting would generate $357 million in state tax revenue for the 2023 fiscal year, which ends March 31. Bettors have blown that away. Through February, mobile sports betting had generated $661 million of tax revenue for education.

New York and Ohio both have large populations and multiple professional sports teams to help drive interest in sports betting.

Arkansas, a much smaller state without major league sports teams, began in-person sports betting at casinos in July 2019. Things really took off last year when it launched mobile sports betting. State figures show nearly $3 million was wagered on this year's Super Bowl — more than three times the annual amount before mobile betting was allowed.

State officials expect people from neighboring states to cross into Arkansas to bet on March Madness.

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Other states also have exceeded expectations for sports betting revenues.

Indiana's sports wagering taxes topped $31 million in the 2022 fiscal year — well more than the $12 million projection when lawmakers authorized it in 2019. New Hampshire's tax take of nearly $24 million from sports betting easily doubled its original projection for the 2022 fiscal year.

But not every state is banking as many bucks as projected from sports betting.

Legislative analysts in Montana, which allows sports bets only from online networks inside bars and casinos, had anticipated that $79 million of bets would be cast last fiscal year, generating $4.8 million of state tax revenue. The actual results were about half that — $2.4 million of state tax revenue from about $45 million of sports bets.

Connecticut received less than $20 million in sports betting taxes in the first 16 months since wagering began in October 2021. Legislative analysts had projected $21 million in its first full fiscal year.

Nationwide, legal sports betting has generated more than $3 billion in state and federal taxes since the 2018 Supreme Court ruling allowing it, according to the American Gaming Association. It's producing about three-quarters of what eventually could be expected from a fully mature market.