March Madness has evolved into one of the most popular sports events of the year, as the top college basketball teams in the country battle it out for the right to be called NCAA national champions.
Among the biggest fans of the “Big Dance” are lawmakers in the growing number of states across the US where sports betting has been legalized, who now look forward to millions of dollars of revenue generated by legal betting on the NCAA Tournament.
The door was opened for US states to pass legislation legalizing mobile sports betting in 2018, when the US Supreme Court struck down a federal law outlawing sports betting everywhere except for Nevada.
In the wake of that decision, lawmakers have joined the rush to legalize sports betting, with 38 states permitting sports betting in some form and an additional six states considering following suit, as of March 2024.
More will follow suit, with US sports betting alone set to reach $50 billion this year.
Legal Sports Betting Revenues on the Rise
According to the American Gaming Association, Americans wagered $120 billion on sports betting in 2023, with the organization estimating the total amount that will be wagered on this year’s edition of March Madness could exceed $2.7 billion.
That presents an irresistible opportunity for lawmakers struggling to find new sources of revenue. In states where mobile sports betting has been legalized, state agencies oversee the issuing of sportsbook licenses, enforcement of regulations, and of course, collection of taxes.
After paying out winnings, sports betting operators earned approximately $11 billion in revenue last year, up from about $7.5 billion in 2022. State governments now collect about half a billion dollars in tax revenue for legal sportsbooks each quarter, or about $2 billion a year, which is approximately 20% of the sports betting operator’s hold rate.
When it comes to March Madness alone, US states could generate as much as $50 million in revenue just from the bets made during the NCAA Tournament.
The tax revenues generated from legal sports betting have been used to fund a wide range of projects ranging from public education and transportation to highways and law enforcement, as well as services designed to reduce and treat problem gambling.
Problem Gambling a Growing Concern?
Recent studies have suggested that 2% of Americans have a gambling problem, but the real figure is likely higher.
Operated by the National Council on Problem Gambling, the National Problem Gambling Helpline has dealt with the issue of problem gambling on the front lines.
The helpline, which can be reached by calling 1-800-GAMBLER, has reported a sharp increase in the number of calls lasting more than a minute since the wave of legal sports betting began.
While the top sportsbooks all offer sports bettors ways to place personal limits on how much money and time they spend making bets, the call for more action to be taken is growing.
Among the proposals to help curb the rise in problem gambling is to require legal sports betting operators to stop accepting credit cards as a deposit method, a step which was taken by the Gambling Commission in the United Kingdom in 2020.
One other proposal that has recently been floated would see sports bettors be forced to take a pause in their sports betting when their sportsbook account runs dry.
With sports betting now possible using easy-to-use smartphone apps that put all the functionality of the sportsbook in the palm of your hand, the issue of problem gambling is unlikely to go away.