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Legal sports betting is a growing source of state tax revenue

February 18, 2024
Las-Vegas-Strip-Sportsbook

Photo by Kay Bell

Not only was last Sunday's Super Bowl LVIII the most watched National Football League championship game ever, it set a betting record.

In case you were one of the apparently very few who missed it, the Kansas City Chiefs beat the San Francisco 49ers in overtime. The comeback was similar to the less dramatic result back in 2020, when the two teams faced off in Super Bowl 54. That year, MVP quarterback Patrick Mahomes and not-yet-Taylor-Swift's boyfriend Travis Kelce raised their first Lombardi Trophy.

The Nevada Gaming Control Board tallied $185.6 million in bets across 182 sportsbooks in the 2024 rematch. That's the most bet on a Super Bowl in any state's history, according to Silver State gambling officials.

This year's NFL big game bets were up 23 percent from 2023, and beat the previous record set in 2022 of $179.8 million, according to the control board's data.

Growing betting revenue nationwide: While Nevada obviously also raked in a lot of non-wagering revenue from all the visitors to host Las Vegas and other cities in the state, it is not alone in enjoying the wagering benefits.

Legalized state-authorized sports betting, which the U.S. Supreme Court OK'ed in 2018, is a growing business in many U.S. states. The revenue it generates funds various state programs, from infrastructure construction and maintenance, public education, law enforcement, and even gambling addiction programs.

The NFL Super Bowl is the largest single gambling event in the United States, but there are many more big sporting competitions that attract bettors. March Madness, with the annual college basketball tournament's games spread over much of that month, produces even more wagering.

All this legal sports betting, says the U.S. Census Bureau, is benefiting more state treasuries.

The Census Bureau's Quarterly Survey of State and Local Tax Revenue (QTAX) recently added sports betting, including pari-mutuels, to the list of state and local tax revenue sources it already tracks.

In the third quarter of 2023, the most recent version of the QTAX, sports betting generated national state level sales tax and gross receipts of $505.96 million, up 20.5 percent from the same quarter a year before.

That substantial yearly increase of more than 20 percent earns this weekend's By the Numbers figure recognition.

Top 10 states in betting revenue: New York State reported the largest share of the nation's tax revenue from betting in the third quarter of 2023 with $188.53 million. That represented more than 37 percent of total tax revenue and gross receipts from sports betting in the United States.

Indiana came in a distant second with $38.6 million, and Ohio third with $32.9 million in sports wagering gross receipts.

Completing the QTAX top 10 state government sports betting tax collections list for 2023's third quarter are Illinois with $32.4 million; Pennsylvania with $28.9 million; New Jersey with $20.2 million; Tennessee with $16.1 million; Massachusetts with $13 million; Virginia with $12.9 million; and Montana with $10.6 million.

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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  • How do you think the increasing legalization and growth of sports betting in the U.S. will impact the way we engage with and consume major sports events in the future?

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