KINGMAN – Arizona stands to make anywhere from $35.8 million to $178.9 million in sports betting revenue by 2023 if it was legalized by the U.S. Supreme Court, according to Global Market Advisors.
The Supreme Court heard oral arguments earlier this week in Christie v. NCAA, a key case in New Jersey that could clear the way for legalized sports betting in other states.
The Court Justices are reviewing the Professional and Amateur Sports Amateur Sports Protection Act, or PASPA, which effectively limits legal sports betting to Nevada, and to a lesser extent Delaware, Montana and Oregon.
The case has the potential to be a landmark states’ rights decision.
Sports betting is on the forefront of discussion in the United States, not only in the gaming industry, but among the general public, said Steve Gallaway, managing partner of Las Vegas-based Global Market Advisors.
“While the market has the potential to generate between $29.2 billion to $138 billion in wagers, it must be regulated and taxed properly to allow it to succeed while addressing illegal sports betting,” Gallaway said.
Global Market Advisors released a report on Nov. 30 examining sports betting and revenues for each state to educate people on the status of the sports betting market, hurdles faced by the industry, political climate and potential revenue.
With an adult population of 5.4 million and average annual household income of $78,783, Arizona’s handle – or the amount of money bet on sports – would be $596.4 million on the low side and $2.75 billion on the high side, GMA projected in its report.
California, with 30.8 million adult population and $106,377 annual income, stands to benefit the most, bringing in between $295 million and $1.2 billion in revenue on a handle of $4.9 billion to $18.2 billion, according to the GMA white paper.
Other key issues addressed in the report include lotteries vs. land-based gaming as operators, Europe’s influence, positions of professional sports leagues and the reality of existing widespread activities and attractiveness of illegal sports betting.
Based on figures presented by the American Gaming Association, more than $150 million is bet illegally on sports each year in the United States. Assuming an average 5.5 percent hold for sportsbooks, that’s $8.25 billion in potential taxable gaming revenue, GMA noted it its executive summary.
“However, to successfully shift these illegally wagered bets to legal enterprises, several issues need to be resolved legislatively, including reasonable tax rates that allow operators to offer similar betting lines as Las Vegas, convenient ways to place bets, the availability of credit, and the ability to easily redeem winnings,” the report said.
Should the Supreme Court completely or partially overturn PASPA, a 50-state model would begin to allow sports betting on a state by state basis. Each state would regulate sports betting within state lines, and may use other states such as Nevada as a model on how sports wagering is taxed and at what rate.