The stakes in Ohio are higher for March Madness this year — and not just because it’s a regional host of the first round of the men’s NCAA basketball tournament.
For the first time, Ohio sports fans can click on a mobile app or use kiosks in bars, restaurants or grocery stores and legally bet on the famous tournament.
Kansas, Massachusetts and Maryland are also newcomers to the world of online sports betting since the NCAA tournament was last mentioned. A total of 33 states and the District of Columbia now offer at least some form of sports betting – each battling for shares in a multibillion-dollar company that has expanded rapidly after the US Supreme Court allowed it nearly five years ago.
OHIO GOES ALL IN
Ohio got off to a booming start when it introduced sports betting in January. In its first month, Ohio bettors wagered more than $1.1 billion and generated more than $20 million in state tax revenue. That almost tripled the amount of revenue that legislative analysts had forecast for the entire first six months of operations. But no one accuses them of missing the mark.
“They couldn’t have known on day one how big our market was going to be,” said Jessica Franks, director of communications at the Ohio Casino Control Commission.
While some states began with limited in-person sports betting and gradually added mobile apps, Ohio started more aggressively — while introducing numerous mobile options and retail locations. Republican Gov. Mike DeWine now proposes doubling the tax rate on sports betting.
New York began allowing sports betting in 2019, but only in-person at four upstate casinos, limiting the market. Betting boomed when the state began allowing people to place sports bets using cell phones and computers in January 2022. In the first month, more than $1.6 billion was wagered from online sports betting, compared to just $15 million from in-person sports betting at casinos.
New York imposes a 51% tax on mobile sports betting revenue — a far higher rate than other states — with most of the revenue going to education. Budget officials originally projected that mobile sports betting would generate $357 million in state tax revenue for fiscal year 2023, which ends March 31. Weather blew that away. By February, mobile sports betting had generated $661 million in tax revenue for education.
State Senator Joseph Addabbo Jr., who championed sports betting as chairman of the Senate Racing, Gaming and Wagering Committee, said even he was amazed by the results.
“There’s certainly an appetite for making sports bets with a mobile device,” Addabbo said.
New York and Ohio both have large populations and several professional sports teams to increase interest in sports betting.
BIG NUMBERS IN ARKANSAS
Arkansas, a much smaller state with no major league sports teams, began offering in-person sports betting at casinos in July 2019. Last year things really took off when mobile sports betting was launched. State figures show that nearly $3 million was wagered at this year’s Super Bowl — more than triple the annual amount before mobile betting was allowed.
State officials expect people from neighboring states to come to Arkansas to wager on March Madness.
“We’ll be surprised if March doesn’t set a new monthly record for sports betting in the state,” said Scott Hardin, spokesman for the Arkansas Department of Treasury and Administration.
Other states have also exceeded expectations for sports betting revenue.
Indiana’s sports betting taxes topped $31 million in fiscal 2022 — well above the $12 million forecast when lawmakers approved it in 2019. New Hampshire’s tax revenue of nearly $24 million from sports betting slightly doubled its original guidance for fiscal 2022.
But not every state is betting as many dollars as sports betting predicts.
Legislative analysts in Montana, where sports betting is only allowed by online networks in bars and casinos, had expected $79 million worth of bets to be placed last fiscal year, generating $4.8 million in state tax revenue would. Actual results were about half that — $2.4 million in state tax revenue from about $45 million in sports betting.
Connecticut received less than $20 million in sports betting taxes in the first 16 months since wagering began in October 2021. Legislative analysts had forecast $21 million for the first full fiscal year.
$3 BILLION INDUSTRY
According to the American Gaming Association, the industry’s largest lobbying organization, legal sports betting has generated more than $3 billion in state and federal taxes nationwide since the Supreme Court’s 2018 ruling. It produces about three quarters of what might ultimately be expected from a fully mature market.
The sports betting debate has shifted from “Is this something we should consider?” to “How should we approach this in a way that best serves our stakeholders?” said Casey Clark, the association’s senior vice president.
Prospects for sports betting expansion into more states this year appear mixed.
A bill to legalize sports betting passed the Kentucky House and went to the Senate on Wednesday, but it still faces a hefty hurdle. Similar bills have died in the Senate in the past, and this year’s version would need three-fifths of the vote to pass.
Backers are also taking another run at a sports betting bill in Minnesota and various other states.
In Missouri, attempts to authorize sports betting have bogged down in the Senate over whether to combine them with regulations for slot-machine-style gaming, which has been popping up in convenience stores.
In Georgia, sports betting bills have stalled amid debate over whether a constitutional amendment is needed, how the potential tax revenues should be spent, and whether sports betting should be combined with the legalization of casinos and racecourses.
Online sports betting is currently lacking in the three most populous states – California, Texas and Florida. The Seminole Tribe of Florida, which received exclusive state rights to conduct sports betting, shut down its online app in December 2021 after federal courts ruled that it violated a rule requiring people to be physically present when wagering on tribal land must.
After the costliest campaign in US history, California voters last November rejected two competing sports betting initiatives backed by Native American tribes and the gambling industry. Backers will likely try again, although it’s unclear when that might be.
Lieb reported from Jefferson City, Mo. AP writers Jeff Amy in Atlanta; Tom Davies in Indianapolis; Andrew DeMillo of Little Rock, Ark.; Brendan Farrington of Tallahassee, Florida; Susan Haigh in Hartford, Connecticut; Amy Beth Hanson in Helena, Mont.; Steve Karnowski of St. Paul, Minnesota; Maysoon Khan in Albany, New York; Holly Ramer in Concord, NH; Bruce Schreiner in Frankfurt, Kentucky; and Julie Carr Smyth of Columbus, Ohio, contributed to this report.