The skepticism of states and governments regarding sports betting is understandable. They are interested in maximising their taxable revenues, while other stakeholders should focus on the integrity of the games, including betting and sporting integrity. Ultimately, the debate about sports betting comes down to money. States have to decide how to tax and regulate the activity. Then, they have to decide which regulatory body they will create to oversee it. While this process can be tedious, it ultimately boils down to the needs of the people involved.
Legalized sports betting is safer than rampant sports gambling
The federal ban on sports gambling has been a dismal failure for the nation’s gaming industry. Most states have successfully regulated other forms of gambling, and the ban hamstrung state authorities in addressing the $150 billion illegal sports betting market. It left consumers at risk of organized crime, siphoned billions from the legal economy, and put sports integrity at risk. Legalized sports betting, despite the federal ban, is still safer than rampant sports gambling.
Many states have adopted legislation to legalize sports gambling. New Jersey has been among the states to legalize sports betting. However, proponents of this law say that it is safer than rampant sports gambling. New Jersey sports betting operates with consumers’ interests in mind. According to a recent study, seventy percent of sports bettors in the state would switch to legal markets if given the opportunity.
It is a small fraction of overall revenue
In addition to being a small fraction of overall revenue, sports betting is not a big moneymaker for states. According to the U.S. Securities and Exchange Commission, sports gambling will only generate a small portion of state revenue, about $2 million per year in Washington and Colorado, respectively. But these numbers are still higher than the optimistic projections that state officials made about sports betting’s potential. In June alone, the New Jersey sports betting industry took in $928 million in sports betting wagers, contributing $8 million to the state’s general fund.
A common misconception about sports betting is that it will result in a huge increase in revenue. In reality, sports betting generates a small fraction of casino revenue and is much smaller than lottery revenue. But states should learn from the experience of other states and consider the best tax policy for their state. For example, the state should determine the tax rate for sports betting by looking at the gross gaming revenue generated by the sportsbooks. It is best to make sure that promotional bets are excluded from the gross gaming revenue. This will help determine the effective tax rate.