$21.8 Billion in Bets: Where the Sports Betting World Stands 2 Years After Overturn of PASPA

$21.8 Billion in Bets: Where the Sports Betting World Stands 2 Years After Overturn of PASPA article feature image

Photo credit: Bennett Raglin/Getty Images for William Hill US

Today marks the two-year anniversary of the Supreme Court overturning PASPA, a law that made sports betting illegal from a federal level.

That ruling gave each state the individual right to decide whether to legalize gambling, and since that time 22 states plus Washington D.C. have adopted sports betting in some capacity.

States With Legal Sports Betting

StateLaunch DateMobile?
ColoradoMay 2020Full mobile betting
IndianaSeptember 2019Full mobile betting
New HampshireDecember 2019Full mobile betting
New JerseyAugust 2018Full mobile betting
PennsylvaniaMay 2019Full mobile betting
West VirginiaAugust 2019Full mobile betting
IowaAugust 2019Partial mobile betting
MississippiAugust 2018Partial mobile betting
NevadaAlready legalPartial mobile betting
OregonOctober 2019Partial mobile betting
Rhode IslandNovember 2018Partial mobile betting
ArkansasJuly 2019Only physical books
DelawareJune 2018Only physical books
IllinoisMarch 2020Only physical books
MichiganMarch 2020Only physical books
MontanaMay 2019Only physical books
New MexicoOctober 2018Only physical books
New YorkJuly 2019Only physical books
North CarolinaN/ARecently legal; no betting yet
TennesseeN/ARecently legal; no betting yet
VirginiaN/ARecently legal; no betting yet
WashingtonN/ARecently legal; no betting yet
Washington D.C.N/ARecently legal; no betting yet

Nevada was obviously the biggest player, as it was the only state that had state-wide legal betting prior to the Supreme Court ruling. Sports betting was legalized in Nevada in 1949, and it was the lone state to be grandfathered into the PASPA ruling, making it the monopoly it was for over a half-century.

But states have been catching up, especially those that were early to legalize and have made fully mobile betting a priority. New Jersey is second among all states in handle since June 2018, per Legal Sports Report, pulling in a whopping $7.05 billion. The only other state to hit the billion mark is Pennsylvania with a handle of $2.32 billion since June 2018.

Those three states make up a huge majority of the overall U.S. handle ($21.8 billion) over the last two years; in fact, they've taken in over 86% of the total money wagered of the 11 states Legal Sports Report has tracked.

Note: Handle and revenue numbers in this article are through March 2020.

Total Handle Since Overturn of PASPA

(All charts are interactive. Hover over graphics for more details.)

To make that more stark…

And the industry was clearly growing quickly, even with just six states offering full mobile betting (letting bettors create an account, deposit and bet all online). Here's the state-by-state handle for the top states:

State Handles by Month Since Overturn of PASPA

All states have seen an expected sizable bump in handle during the fall when the major sports — college basketball and football, the NBA and especially the NFL — are in season. But look at the year-over-year growth for New Jersey during the fall swings.

MonthHandleYoY Growth
September 2019$445,563,503142.22%
October 2019$487,924,50487.15%
November 2019$562,675,54370.12%
December 2019$557,786,16174.76%
January 2020$540,113,45240.19%
February 2020$494,813,80754.45%

Lots of Players Getting Into the Game

The U.S. has seen an influx of sports betting operators, including DraftKings and FanDuel making the jump from DFS companies to sportsbooks. William Hill, PointsBet and others have expanded from European and Australian operations, and Nevada-based companies like MGM and Circa have recently expanded into other states, notably Colorado in May 2020.

The big books have been especially aggressive in growing into multiple states as they've come online:

  • New Jersey:DraftKings, FanDuel, BetMGM, PointsBet, Sugar House, William Hill, bet365, BetStars, Golden Nugget, Caesars, Resorts, 888 Sportsbook, BetAmerica
  • Colorado: DraftKings, FanDuel, BetMGM, BetRivers with PointsBet, Circa, SuperBook, Wynn, BetAmerica, Smarkets, Betfred and theScore Bet coming
  • Pennsylvania: DraftKings, FanDuel, BetRivers, Sugar House, Parx, FoxBet, Unibet
  • Indiana: DraftKings, FanDuel, BetRivers, PointsBet, BetMGM

And more big players are still to come: Penn National, for example, which bought a 36% stake in Barstool Sports this year, has been vocal about creating a sportsbook and app. Just a week after PASPA was overturned in May 2018, Flutter Entertainment, which owns Paddy Power and Betfair — two of the biggest gaming entities in Europe — announced an acquisition of FanDuel to get into the U.S. market.

And it's not just gaming companies itching to get a piece of the pie: As Darren Rovell reported Tuesday, Patriots owners Robert and Jonathan Kraft, along with sports/entertainment companies like Madison Square Garden, the WWE, Legends Hospitality (owned by the Cowboys and Yankees), the NHL and Disney (owner of ESPN) all have sizable investments in DraftKings.

Here at The Action Network, we've partnered with the PGA Tour to launch the GolfBet content platform. The NBA has wanted to be progressive in this space and has already launched partnerships with DraftKings, FanDuel, William Hill and others.

Even in the midst of economic uncertainty, it wouldn't be surprising to see more major U.S. companies and sports leagues be aggressive in the betting world.

Coronavirus, the Stoppage of Sports and What's Next for Legalized Betting

It's obviously been a tough second quarter of 2020 for sportsbooks given that live sports essentially stopped overnight due to the coronavirus outbreak. New Jersey, for example, had a handle in March of just $181.9 million, which was a 65% drop from its six-month trailing average, per Darren Rovell's piece. He reported that was the lowest handle since September 2018, which was just the third month of betting in the state. It was the same story in April.

Not all is bleak, though: UFC, the first major live U.S. sport to return since the beginning of March, shattered handle records this past weekend for UFC 249. From DraftKings' Stephen Miraglia before the main event: “UFC 249 is officially the most-bet MMA event in DraftKings Sportsbook history — and the main card hasn’t even started yet.”

There are bullish economic indicators for sportsbooks as well. While brick-and-mortar casinos are struggling and pushing to re-open, online companies and operators have seen a boost in stock price lately, including DraftKings, Penn National and Boyd Gaming.

The biggest question surrounding sports betting — other than when live sports will return, which we track extensively here — is whether COVID-19 and social distancing will encourage states to legalize sooner than they would have.

Legalized betting can be taxed, providing much-needed revenue to state economies. Some states like Virginia and Tennessee could be live in 2020. Others like Maryland, Michigan and Louisiana are pushing for special legislative sessions and to get referendums on ballots come November.

All in all, sports betting is still very early in its infancy in the United States, and the states that became early proponents have reaped incredible financial reward. The coronavirus outbreak certainly hindered what was an exploding industry, but there remains bullish signs — especially with sports returning.

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