Sports Betting Tax Revenue By State – Top 5 Earners
By
Jan 4, 2021
Sports Betting in 2020 was full of its ups and downs. New Jersey reports a record high November handle, again… Brick and mortar casinos continue to be hit hard by the pandemic, Tennessee’s first month’s revenue is now setting the standard for states that will become legal in 2021. Now, as we wait for states to report their December earnings, let’s look at 2020’s top tax earners so far.
#5 – Illinois Sports Betting Tax Revenue for 2020
2020 kicked off to a rocky start for sports betting in Illinois with a March 9th launch only to be suspended on March 16th because of COVID concerns. Online sports betting resumed on June 18th and the market has been growing ever since. As of October 2020, sports bettors have placed $941,403,906 in bets generating $60,335,613 in revenue and $9,749,255 in tax revenue for their state at a 15% tax rate.
| Illinois |
Handle |
Revenue |
Taxes |
|---|---|---|---|
| March | $997,739 | $72,028 | $12,242 |
| April | COVID | COVID | COVID |
| May | COVID | COVID | COVID |
| June | $8,281,803 | $368,651 | $59,446 |
| July | $52,524,820 | $3,623,985 | $585,623 |
| Aug | $140,065,649 | $7,233,360 | $1,176,754 |
| Sept | $305,222,938 | $6,837,289 | $1,107,906 |
| Oct | $434,310,957 | $42,200,300 | $6,807,284 |
| Total | $941,403,906 | $60,335,613 | $9,749,255 |
Illinois governor J.B Pritzker had to adjust on the fly once the pandemic hit and suspend its sports betting requirement that bettors in Illinois must go to a casino and register before having the ability to place a bet online. That opened up the online market and by October 2020, 94% of its sports betting handle ($434,310,957) was all online action.
Casinos were quick to react and reached out to online giants to help with this online betting trend they were facing. Casino Queen partnered up with Draftkings (DKNG) to manage their $141 million online October handle. Rivers Casino ($106 million Oct Handle) and Par-A-Dice Casino partnered with FanDuel(TRWH).
What are Illinois bettors betting on? Football took in $191 million in action and the rest was between basketball, baseball, tennis, and soccer.
#4 Rhode Island Sports Betting Tax Revenue for 2020
Just like Illinois, sports betting revenue nearly collapsed in Rhode Island once the pandemic hit and Governor Gina Raimondo had to sign into law two bills in July 2020 that eliminated the in-person registration requirement to keep sports betting alive. As of November 2020, Rhode Island’s 2020 handle $458,727,812, Revenue $40,371,991 and Tax Revenue $20,589,715 at a 51% tax rate.
| Rhode Island |
Handle |
Revenue |
Taxes |
|---|---|---|---|
| Jan | $26,939,692 | $3,279,241 | $1,672,413 |
| Feb | $28,147,862 | $2,323,432 | $1,184,950 |
| March | $8,949,157 | $841,767 | $429,301 |
| April | $591,377 | $27,381 | $13,964 |
| May | $1,533,114 | $163,472 | $83,371 |
| June | $2,032,803 | $101,328 | $51,677 |
| July | $6,738,626 | $351,425 | $179,227 |
| Aug | $23,116,965 | $1,423,391 | $725,929 |
| Sept | $31,293,150 | $2,352,788 | $1,199,922 |
| Oct | $34,704,413 | $4,388,841 | $2,238,309 |
| Nov | $35,098,445 | $6,281,321 | $3,203,474 |
| Total | $458,727,812 | $40,371,991 | $20,589,715 |
After the bills passed, July’s handle started on the upswing again compared to June’s sad numbers. July’s handle was $6,738,626 vs June’s handle of $2,032,803. By August, the state started seeing record handle numbers $23,116,965 vs $10,060,066 in 2019 and revenue followed $725,929 vs $434,412 in 2019.
IGT and William Hill partnered up to provide the ocean state bettors a sports betting product that could handle their sports betting action. Their app and online product received 44% of October’s handle and 45% of November’s handle.
#3 Nevada Sports Betting Tax Revenue for 2020
The most mature betting market, Nevada, comes in at number 3 with record-breaking numbers reported for November. Even though the pandemic hit the strip hard, online sports betting continues to grow.
Nevada’s 2020 handle comes in at an impressive $12,092,470,828 billion with $725,483,208 million in revenue. The state generated $93,813,623 in tax revenue at a 6.75% tax rate even though casinos revenue fell 32.46% because of the COVID restrictions.
| Nevada |
Handle |
Revenue |
Taxes |
|---|---|---|---|
| Jan | $502,543,641 | $20,152,000 | $1,360,260 |
| Feb | $489,105,725 | $38,064,000 | $2,569,320 |
| March | $141,108,201 | $1,455,000 | $98,213 |
| April | $56,263,737 | $2,669,000 | $180,158 |
| May | COVID | COVID | COVID |
| June | $78,152,387 | -$483,000 | n/a |
| July | $165,552,030 | $6,295,000 | $424,913 |
| Aug | $474,948,414 | $16,985,000 | $1,146,488 |
| Sept | $575,144,025 | $32,895,000 | $2,220,413 |
| Oct | $659,899,331 | $42,388,000 | $2,861,190 |
| Nov | $609,376,849 | $50,554,535 | $4,171,973 |
| Total | $12,092,470,828 | $745,195,000 | $50,300,663 |
Online sports wagering accounted for 56.4% of the bets taken during the month. Football action came in at $56 million which was a record for Nevada. Experts suggested that the lack of NBA and NHL helped the high football numbers as well as November having an extra Sunday.
#2 New Jersey Sports Betting Tax Revenue for 2020
New Jersey bettors made their mark this past November as the Garden State reported their monthly sports betting handle and for the 4th time in a row, they have broken state and a national record (set by New Jersey previously) with a handle of $931 million. Online sports betting made up 93.6% ($872.1 million) of the reported number. The Garden State’s 2020 handle to date is $10,850,873,475 with revenue at $725,483,208 and tax revenue of $93,813,623 at a 8.5% tax rate.
| Nevada |
Handle |
Revenue |
Taxes |
|---|---|---|---|
| Jan | $540,113,452 | $53,561,626 | $7,328,175 |
| Feb | $494,813,807 | $17,000,928 | $2,377,923 |
| March | $181,908,529 | $13,181,101 | $1,732,276 |
| April | $591,377 | $27,381 | $13,964 |
| May | $117,821,281 | $9,912,062 | $1,303,244 |
| June | $165,014,553 | $12,639,282 | $1,652,950 |
| July | $315,118,805 | $29,551,987 | $3,671,891 |
| Aug | $667,979,150 | $39,507,181 | $4,919,340 |
| Sept | $748,588,349 | $45,083,178 | $5,604,501 |
| Oct | $803,096,172 | $58,508,647 | $7,440,873 |
| Nov | $931,620,415 | $50,554,535 | $6,233,822 |
| Total | $10,850,873,475 | $725,483,208 | $93,813,623 |
Although the state almost hit $1 billion in bets, brick and mortar casinos and racetracks saw very little of that action. Many operators are seeing the light at the end of the tunnel with their online betting offerings and are going all-in.
With the success of sports betting, now lawmakers are re-evaluating the ban on betting on college sports. If the ban is overturned, it could give the Garden State the boost needed to hit that Billion dollar mark.
Another change is that a new online operator has joined the New Jersey family. Malta sportsbook operator Tipico with their app powered by Sportsradar offers bettors more betting options.
#1 Pennsylvania Sports Betting Tax Revenue for 2020
It is no surprise that at a 36% tax rate and an aggressively growing market, Pennsylvania ended up on the top spot but concerns of a dip in the numbers from October to November while neighboring states have exceeded their hold numbers month over month, have many scratching their heads. For 2020, Pennsylvania’s hold to date is $4,540,029,200 with revenue at $338,806,887 and tax revenue of $84,999,203 at a 36% tax rate.
| Pennsylvania |
Handle |
Revenue |
Taxes |
|---|---|---|---|
| Jan | $348,381,708 | $31,580,803 | $8,222,829 |
| Feb | $329,765,782 | $11,432,097 | $1,700,0911 |
| March | $131,330,059 | $8,606,120 | $2,480,132 |
| April | $46,015,988 | $3,202,680 | $1,038,050 |
| May | $77,510,033 | $5,918,697 | $1,738,436 |
| June | $89,002,562 | $7,959,790 | $2,397,657 |
| July | $164,782,229 | $13,651,865 | $2,933,093 |
| Aug | $364,985,422 | $27,593,677 | $6,578,668 |
| Sept | $462,787,392 | $18,277,566 | $2,257,158 |
| Oct | $525,802,524 | $47,834,647 | $13,239,694 |
| Nov | $491,910,713 | $48,500,443 | $11,226,836 |
| Totals | $4,540,029,200 | $338,806,887 | $84,999,203 |
In October 2020, Pennsylvania reported a sports betting handle of $525,802,524 while in November, the handle came in at $491,910,713. Revenue was up month over month, $47,834,647 vs $48,500,443 so that was a sigh of relief.
There is no way of knowing how the wagers breakdown since Pennsylvania doesn’t breakdown their handle by sport but there were 5 Sundays in November bringing in more NFL action plus the NBA finals plus plenty of College Football games to bet on.
Online sportsbook operators like Draftkings, Barstool, and FanDuel control 70% of the state’s online sports betting handle, and all were down for the month. All operators do admit that they have been aggressive with their free plays these past couple of months but did give out fewer free plays in November than in October which could be a factor in bringing in new business.
With NBA back again, it will be interesting to see if Pennsylvania gains traction again or continues on the decline.