Research Firm: 37 States Projected to Have Legal Sports Betting by 2023
Ethan Miller/Getty Images. Pictured: The Arizona Wildcats mascot.
A projected 37 states will have legal wagering by the end of 2023, and 29 of those states will allow bets online, according to gaming industry research firm Eilers & Krejcik.
Roughly half the American adult population already lives in a state with legal sports betting just two-and-a-half years after the Supreme Court struck down the federal wagering ban. For comparison, it took roughly 80 years for legal casino gaming to reach half the U.S. population, Eilers & Krejcik senior analysts Rebecca Giden said during an industry conference Tuesday.
“The next year or two, we’re looking at 60 to 80% of the U.S. population having access to some form of sports betting,” Giden said. “So it’s been an incredible clip of legalization and implementation as well.”
Next Wave Prepares for 2021
U.S. sports betting has expanded rapidly since the ban was ruled unconstitutional in May 2018.
Twenty-two states, Washington D.C. and Puerto Rico either take bets now or have passed laws to do so. Voters in Maryland, Louisiana and South Dakota approved sports betting on their respective 2020 ballot measures and all three are expected to take bets once officials finalize regulations, possibly as early as next year.
Lawmakers in Arizona, Connecticut, Kansas, Maine and Missouri have introduced sports betting bills since the ban was overturned and are among the most likely candidates to pass legalization laws in the next few years, Eilers & Krejcik projects. Ohio and Massachusetts, both of which are still considering bills this calendar year, are also among the likeliest states to join the next wave of legal wagering. Tribal casinos in North Dakota and Wyoming are also laying plans to accept sports wagers.
Legal sportsbooks are projected to make between $1 billion and $1.3 billion in revenue in 2020, according to the firm. That could rise to $6 billion annually by 2023 if a dozen or so additional states launch online wagering options. Mobile wagering makes up as much as 90 percent of betting handle in most mature markets with both options.
Overall, Eilers & Krejcik believes virtually every state except Utah, Alaska and Hawaii could, at some point, legalize sports wagering. If this “full” list approves full mobile wagering, the sports betting market could eclipse $19 billion in annual revenues.
Though as many as 47 states could have legal wagering sometime in the future, work remains for many states, especially in what would be the nation’s most lucrative markets.
Notably, industry researchers aren’t expecting sports betting legislation to pass in the next few years in any of the three largest states by population; California, Texas and Florida. New York, the fourth-most populated state, takes retail sports bets at a few commercial and tribal casinos but has struggled to reach a framework to do so online.
California Native American groups are backing a constitutional amendment that would permit betting on sovereign tribal lands, but that isn’t set to reach the ballot until fall 2022 and wouldn’t allow online wagering.
Anti-gambling political interests remain a major obstacle to many other states, Giden said, which is playing out in several other key markets.
Texas has opposed most new gaming forms for decades and seems unlikely to change in the near future. Florida is also dominated politically by conservative interests, and its legislature is forbidden by its constitution from passing any gambling laws without a voter-approved referendum.
That opposition could be overcome by finances, Giden said, especially in the wake of the COVID-19 pandemic. Most states are required to balance their budgets and all are seeing diminished tax revenues heading into their respective 2021 legislative sessions. Though sports betting amounts to a small fraction of most states’ multibillion-dollar budgets, otherwise recalcitrant lawmakers may be more willing than ever to support new revenue sources.
Revenues were an incentive boost for sports betting legislation in Tennessee, one of the most politically and culturally conservative states, as it passed the nation’s first online-only wagering bill. Voters in other traditionally conservative states such as Arkansas, Louisiana and South Dakota overwhelmingly approved legal betting and lawmakers in Mississippi and Montana have passed sports betting legislation — all doing so before the pandemic.
Though challenges remain for legal sports betting in the remaining two-dozen or so states without legal wagering options, the question now seems more like when, not if, most Americans will be able to place a bet in their home state.