States See Sports Betting Potential To Cover Budget Deficit

Published: 03/07/2020 | Last Updated: 22/02/2022

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Sports betting is one of the fastest-growing industries all over the world. People love sports, and gambling has been around for decades. The industry is now cementing its influence across the country. More and more states are pushing the regulation and control of the industry.

During the lockdowns, sports betting and online casinos became the source of entertainment of people trapped in their homes with nothing else to do. In the absence of major sports events, gamblers placed their bets on darts, table tennis, and other non-contact sports.

States with regulated online sports betting operations collected massive revenue from the industry.

The US has more than 18 states with the regulated online betting industry. The pandemic proved the sector’s potential to generate income useful in the recovery and growth of the state.

Sports betting to cover up budget deficits

State regulators believe in the potential of sports betting and other online gaming industries to cover budget deficits of states. The budget is already a problem in many states before the pandemic. State revenues collapsed when the government mandated the shutdowns when millions of people lost their jobs, and operations of businesses stopped.

The Center on Budget and Policy Priorities estimated budget deficit of nearly $615 billion due to the impact of the novel coronavirus on the economy. Lawmakers now view sports betting as a way to raise revenue to cover the deficit.

In 2019, state and local gaming tax collected from commercial casinos reached more than $10 billion. Sales and income taxes from casino gaming is not yet included in the figure. States started approving operations of casinos because of the revenues they provide.

The states will soon allow sports betting to operate in their territories as their influence rises across the country.

More states allowed sports betting

Aside from revenue, the states also see the capacity of the industry to provide more jobs Americans.

Launching sports betting operations will only take not more than six months. Sportsbooks are launching their mobile apps to allow access to a greater number of clients.

Through the sportsbooks apps, clients can place their bets without going into the actual sports betting booth. Players can place their bets while enjoying the comfort of their homes. In the absence of significant sports events, sportsbooks allow clients to place bets on sports events of other countries like the Korean baseball and table tennis.

Four more US states are planning on passing regulations to control and regulate sports betting. Tax rates in states vary between 10 to 20 percent of the company’s revenue.

The industry is expected to generate nearly $1 billion in taxes in a year. The leading sports betting markets, such as New Jersey, Nevada, Pennsylvania, and Indiana, will hugely contribute to the massive collection.

The American Gaming Association revealed that Americans’ bet on illegal sports betting reached $150 billion every year.

In June, California lawmakers proposed to regulate sports betting, to collect more than $700 million in revenue, but operators of tribal casinos opposed it.