US sports betting revenue could reach $3.1 billion in 2021

Revenue from legal sports betting in the US could reach $3.1 billion in 2021 and as much as $10 billion within five years, according to estimates from a company that tracks gambling legislation and performance.

VIXIO GamblingCompliance issued a report Wednesday projecting that at least 6 and as many as 14 additional states will legalize or expand sports betting in 2021, the Associated Press reports. That fits with projections by numerous analysts that nearly half the country may have legalized sports betting by the end of this year.

The company estimated that revenue from sports betting would reach $2.6 billion to $3.1 billion this year, an increase of as much as 100% over the $1.55 billion it estimates will have been generated from sports betting in 2020 (December figures have not yet been reported from most states). By 2025, that figure could hit $10 billion, the report said.

New York Governor proposal

The report came as New York Gov. Andrew Cuomo reversed his long-held opposition to mobile sports betting, opening the possibility of a lucrative new market in one of the nation's most populous states. It also could take a significant share out of New Jersey's leading position in the national sports betting market; about 20% of New Jersey's sports bets are placed by New Yorkers crossing the state line. 

At a news conference, the governor proposed having New York run sports betting operations to maximize tax revenue. He called on the New York State Gaming Commission to issue a request for proposals to select and license a sports operator or platform to offer mobile sports wagering in the state.

Yaniv Sherman, head of commercial development at 888 Holdings, welcomed a possible full-scale entrance of New York to the national market. “New York has always been the critical, strategic and much-anticipated component of any U.S. online gambling agenda, and it represents one of the top three states in terms of economic potential," he said. “It’s no surprise that this is moving on the back of budget deficits in states like New York, and I think it’s a great way of bringing tax dollars from offshore operations to the city and state coffers.”

Likewise, Adam Greenblatt, CEO of BetMGM, said his company is eager to enter New York's expanded market, saying Cuomo's move “has the potential to bring leaking tax dollars back to New York from offshore books and nearby states.”

Sara Slane, a gambling analyst and former official with the American Gaming Association, predicted New York quickly would become a top-tier state in the sports betting market. “Gov. Cuomo’s embrace of mobile sports betting immediately positions New York to soon lead all other states and generate significant revenue for state coffers,” she said. "New York, with a population of nearly 20 million, dwarfs any other state with legal betting and should have no problem regularly topping $1 billion a month in wagers.”

New York, like most states, expects to have a smoking crater where its budget used to be due to the economic impact of the coronavirus pandemic. That is expected to play a large part in additional states considering or enacting sports betting legislation this year. The report predicted an aggressive campaign to legalize online sports betting in Texas this year, with team owners allied with DraftKings, FanDuel and BetMGM to press for legalization. That would require a constitutional amendment and a statewide referendum.

It forecast renewed legislative efforts to enact sports betting in Massachusetts, Georgia, Ohio and North Carolina, among others, while noting that sports betting efforts in Florida and California remain complicated by the impact they would have on tribal gambling operations and rights.