US Sports Betting Revenue On The Rise – Up 70% From Last Year

Samu-Ville Lampiranta
By Samu-Ville Lampiranta
Sports & Casino Expert
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Updated Dec 6, 2022
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Read time 11 min

August is usually a fairly slow month in terms of sports, but there were no signs of slowing down for US sportsbook operators. While the revenues increased over 116% year-over-year in August, it seems like this is a small fragment of the bigger picture. Online sports betting revenues are likely to increase in the future as well, thanks to new states opening up for operators. 

Online Sports Betting Revenue 

There are many aspects to sports betting revenue growth. One of the key elements is the number of states allowing betting, especially online gambling. Once a state allows gambling, it is up to the operators to offer odds for different events and find the clientele against the fierce competition. 

In addition to sports betting, it will remain to be seen whether more states will also allow online casinos to operate within their borders. While more states have allowed online betting than not, the same cannot be said about casinos – so far, only a handful of states allow online slots and table games.  

Sports Betting Revenue Projections 

In 2020, there was 21.6 billion dollars worth of bets made, but in 2021, the numbers had gone up to $57.71 billion. The sports betting revenue grew nearly 180% to $4.33 billion, and it looks like this trend will also continue in the coming years. 

The US sports betting market is projected to continue growing at a fairly fast pace. The commercial sports betting revenue was up 69.6% year-over-year in August, reaching $3.9 billion. It looks likely that the growth will continue, but how fast can it be? The revenue is projected to more than double by 2028, but it could well be that the growth rate will be even faster than that. 

New States Could Bring More Revenue 

One of the biggest reasons explaining the growth between August 2021 and August 2022 is that six more states allowed betting during that time. That is also the number one reason why the revenues are likely to continue growing since new states are opening their markets to betting operators in the near future. 

Maine passed a gambling bill in May 2022, which should be effective midway through 2023. In Nebraska and Maryland, the bills were passed and signed already in 2021, but it is still unclear when these acts will be in force. Ohio and Massachusetts have also passed their own gambling bills. In Ohio, it is anticipated to launch at the beginning of 2023, and in Massachusetts, either late 2022 or the beginning of 2023. 

These newest additions will likely bring a massive increase in revenue. Many operators have their eyes on Ohio, as the state’s population is close to Pennsylvania, which has become one of the biggest states in terms of revenue. 

Sports Betting By State 

Ever since the US Supreme Court struck down the federal laws banning betting, more than half of the states have allowed online sportsbooks to operate, and roughly two-thirds of the states allow betting in some form, whether via a mobile app or in person. 

When considering the overall revenue, the biggest gambling hub is Nevada – which is hardly a surprise. The second biggest sportsbook market outside of Nevada is New Jersey, where over 80% of all bets are made online. 

Ever since legalizing online sportsbooks in 2019, Pennsylvania has been en route to becoming one of the biggest states in betting. As it is also one of the most populous states, it could be the next big thing in the US sports market. 

With more and more states allowing gambling, the spotlight has been on California, home to nearly 40 million Americans. It doesn’t look likely that the good people of the Golden State will get to enjoy online betting any time soon, with governor Gavin Newsom being of the loudest opposers of the proposed gambling act, known as Proposition 27. 

One aspect of online gambling that should not be neglected is the variety of games on offer in each state. While most states have only allowed online sports betting, a few have also legalized online casinos. Among these states are Pennsylvania and New Jersey, and it looks like more are to follow. 

Sports Betting Tax Revenues

After many states, from Arizona to Wyoming, legalized betting and started racking up the tax dollars the operators generate, many others have shown interest in doing the same. It is no wonder why since the tax revenues speak for themselves. 

In Arizona, for example, the state has accrued over $21 million in taxes ever since the sportsbooks opened. New Jersey and New York have collected over $268 million and $472 million, respectively, so the numbers are truly impressive. 

As the revenues of gambling companies have been growing year after year, so have the tax revenues of states. It will be interesting to see what happens with individual states’ tax policies, as that might affect the interest of companies to focus on one state instead of the other. 

As we said earlier, Pennsylvania looks to be the golden goose. Still, it’s at a rather high cost: The Keystone State charges gambling companies a licensing fee of $10 million, and the operations are slammed with a 36% tax.  

Crypto Betting Is Growing Too 

While the sports betting market as a whole is getting bigger, so is betting with cryptocurrencies. It looks likely that both of these trends will continue in the future. When looking at the year-on-year growth figures, it becomes evident that the cryptos are slowly taking over fiat currencies. 

According to gambling company SoftSwiss, 70.4% of all bets made in the first half of 2021 were made with fiat currencies, meaning a bit under a third of all bets were made using cryptos. But comparing the numbers with those of one year later, the percentage of fiat bets has fallen to 65.2% while crypto bets have grown to a 34.8% share. 

Even with the so-called crypto winter blowing over the markets with its freezing and deadly touch, it seems like crypto gamblers are not letting the price fluctuations affect them too much. What will the market shares look like once the crypto spring finally comes? 

It is impossible to know for sure, but keeping these current trends in mind, it could well mean that the cryptos are closing in and challenging the dominance of fiat currencies. 

Top Cryptos on Gambling Sites 

Gambling with cryptocurrencies is on the rise, but with which cryptos exactly do people gamble? The list and its order are probably not a huge surprise to punters who are also familiar with digital currencies. Although the SoftSwiss analysis does not cover the whole crypto-gambling industry, these numbers can be considered indicative globally. 

The number one by a rather large margin is bitcoin. In the first half of 2021, bitcoin’s share of the crypto-gambling market was a whopping 80.75%. However, the market share had dropped to 71.2% by the first half of 2022. 

At the same time, the second biggest currency used in gambling, Ethereum, saw its market share rise from 9.5% to 14.7%. Litecoin, third on the list, also increased its share from 4% to 6.15%. Dogecoin and USDT have 2.9% and 3.2% market shares, respectively. 

While bitcoin still has a massive lead in the gambling sector, looking at the big picture, it seems like it might slowly melt away. Many smaller digital currencies, like Cardano, Tron, and Binance Coin, currently have only a small fraction of the market but could start growing quickly. 

The Revenues Will Likely Continue to Grow 

We seem to be looking at two simultaneous trends: on the one hand, more and more states are allowing sports betting, driving up the revenues of the companies as well as the tax revenues. On the other, investors’ interest in all things crypto seems to be growing as well, which evidently also means a growing interest in crypto betting. 

While it might be too simplistic to say that these things are directly tied to one another, it would also be foolish to assume that both of these markets growing simultaneously is just a coincidence. 

The only safe thing to say is that the gambling revenues will continue to grow with new states opening up for sportsbook operators, and it looks likely that once the last crypto winter is over and the temperatures are rising again, the crypto markets will continue to grow as well. The one-billion-dollar – or maybe one–trillion–dollar – question is: how fast can the growth be? Nobody has the answer right now, but we are surely interested in finding out in the coming years. 

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Samu-Ville Lampiranta
Samu-Ville Lampiranta
Sports & Casino Expert

Samu-Ville knows the ins and outs of online gambling having worked in the industry since 2013 in various roles from customer support agent to content writer and manager. He knows how to look at casinos and sports betting sites from both sides of the fence, and uses his experience to give his articles a unique view from the inside.