The all-time state tax revenue from sports betting recently surpassed $5 billion, reaching the benchmark in less than six years since the first wagers were placed beyond Nevada’s borders in June 2018. More than 40% of that total — $2.15 billion — came in 2023, which was a banner year for sportsbook operators.
New York Leads the Way
When then-New York Gov. Andrew Cuomo was shepherding mobile sports betting through the state legislature, he claimed state tax revenue would be $500 million annually. That total was met with skepticism and derision, but two-plus years later, Cuomo would be well within his right to take a victory lap on this front.
The Empire State’s nine digital operators have paid nearly $1.73 billion in taxes to the state’s education fund in 26 months. FanDuel, the marketplace leader nationally, would rank second as a state based on its New York tax payments totaling $835.2 million. DraftKings would be fourth at $535.9 million, right behind Pennsylvania. New York’s mobile tax levy in 2023 totaled $861.8 million, an increase of $169 million from 2022. The year-over-year increase in terms of dollars would have led the U.S. as its own entity in 2023.
Pennsylvania and Illinois Follow Suit
Second to New York in tax revenue was Pennsylvania, which also has a high tax rate of 36%. Illinois, which saw the third highest amount, taxes at 15%, and New Jersey, which just missed the $100 million mark, taxes between 8.5% and 13% depending on the source.
State Tax Revenue in 2024
State taxes from reports covering the first two months of 2024 have already surpassed $400 million, which puts the year on pace for yet another all-time high. New York greatly outperforming Cuomo’s estimate.
The Road Ahead
The expansion of sports betting across the U.S. continues to generate substantial tax revenue for states. As more states legalize and regulate sports betting, the industry’s financial impact is expected to grow even further.
