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United States How the May 2018 SCOTUS decision changed the gambling world
To be clear, the U.S. sports betting market was huge. It was a boon for overseas bookmakers to the tune of $5-$10 billion in gross sports betting handle every year. That's on top of $10-$20 billion wagered every year with illegal bookmakers in the U.S.
While U.S. residents were under the impression it was illegal to use offshore gambling sites, the actual laws on that were not clear. The only clear thing came from the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). That law made it illegal to fund gambling accounts with funds from credit/debit cards and wire transfers.
New Jersey Goes to War
In the early part of 2017, the State of New Jersey, through the efforts of former governor Chris Christie, challenged the Professional and Amateur Sports Protection Act of 1992. The challenge claimed this law was unconstitutional and that the sports betting question should be resolved at the state level.
After a battle with the U.S. Department of Justice, the Supreme Court of the United States (SCOTUS) made its decision on the matter. That decision came on the morning of May 13, 2018. The Justices indeed ruled in favor of New Jersey. The majority opinion stated that the ban was unconstitutional and going forward, each state would have the right to decide its own sports betting fate.
Almost immediately, three states came forward with sports betting legislation. The sports betting forerunners were Delaware, Pennsylvania, and of course, New Jersey.
Equally important in the SCOTUS decision was the lifting of the UIGEA law. That opened the door for states to legalize all forms of Internet gambling, including Daily Fantasy Sports, horse race wagering, lotteries, sports betting, and online casino gambling. The last paving the way for sites like No Deposit Bonus to capture an entirely new audience without fear of retribution from the U.S. government.
What the Data Says
In the fight to have the Professional and Amateur Sports Protection Act lifted, experts made claims that the U.S. sports betting industry could eventually create upwards of $150 in sports betting handle. It looks like the experts were on target. In 2023, 37 U.S. states generated $119.84 billion in handle. That represented a 27%+ increase over the prior year.
What's even more impressive about the aggregate U.S. sports betting data is it doesn't include highly-populated states like California, Florida, and Texas. Should any or all of those states eventually pass the appropriate sports betting legislation, the annual handle will certainly exceed the proposed $150 billion.
How Lifting the U.S. Sports Betting Ban Changed the Gambling World
The effect of the SCOTUS' decision to lift the sports betting ban has been profound on many levels. First, it brought a lot of the offshore betting activity back to the U.S. much to the chagrin of offshore bookmakers in Europe. At the local level, U.S. illegal bookmakers have certainly seen a significant drop in profits. That's except for illegal bookmakers in the aforementioned states. Here are three (3) other areas where legal sports betting in the U.S. has changed the gambling world.
More Sports Bettors in U.S. and Worldwide
Where the ban-lifting has had the most profound effect is it has opened to door for wanna-be U.S. sports bettors who followed prior laws. These are folks who refused to use illegal betting means, preferring to wait for the day they would go to Nevada or things change at the state level. With the SCOTUS's decision, that day arrived. The number of regular U.S. sports bettors has since exploded from a few million to tens of millions nationwide.
More Tax Revenue for State Governments
It's certainly worth mentioning things have also changed in dramatic fashion for state governments all over the country. Why? It's all about tax revenue. If U.S. sports bettors are generating $120 billion in sports betting handle at a gross revenue holding rate of 8% (standard), that's $9.6 billion in taxable revenue. At an average tax rate of 15% per state, that's a possible $1.44 billion in tax revenue being dumped collectively into state coffers.
Supposedly, the beneficiaries of this tax revenue are schools (education) and state infrastructures. The follow-through remains to be seen.
Increase in Problem Gambling Issues
Of course, change will sometimes come with negative consequences. In the case of increased online gambling (sports betting and casino gambling), the dark side is the anticipated increase in problem gambling issues. To be honest, it's not worse by the percentage of problem gamblers as the 8%-10% holds steady. The problem is more people are experiencing gambling problems because more people are gambling. The issue is being dealt with at the state level.
Here's the kicker. Legalized sports betting in the U.S., is still in its infancy. The chances of more changes to the gambling world in the future are awfully high.
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