THE SPORTS. BETTING. OPPORTUNITY: New Research Shows Legalized Sports Betting Will Generate. Economic Growth, American J
THE SPORTS BETTING OPPORTUNITY: New Research Shows Legalized Sports Betting Will Generate Economic Growth, American Jobs and Tax Revenues
Since 1992, sports betting outside Nevada has been largely illegal in the U.S. But the federal ban has done nothing to stop Americans from betting on the games they love. Americans illegally wager an estimated $150 billion on sporting events each year. The American Gaming Association (AGA) supports repealing the sports betting ban and giving states the power to decide whether to allow betting, just as they already do for other forms of gaming. A new report by Oxford Economics demonstrates that legalizing sports betting won’t just bring the law in line with American attitudes and desires – it will also deliver powerful economic benefits, including:
Signficant Economic Impact … Legal, regulated sports betting will generate an estimated $21.9 to $26.6 billion in total economic impact. This impact will be generated by spending from sports betting patrons and the effects of that spending as it ripples throughout the economy.
More Good Paying, Americans Jobs … Legalized sports betting will create between 125,000 and 152,000 American jobs paying between $6.0 billion and $7.5 billion in total wages.
Higher U.S. GDP … If legalized, sports betting is expected to contribute between $11.6 billion and $14.2 billion to U.S. GDP.
Much-Needed Tax Revenues for Communities Across America … Bringing sports betting out of the shadows so it can be regulated and taxed will generate an estimated $4.8 billion to $5.3 billion in federal, state and local tax revenue – funds that can be used for vital public purposes like law enforcement, education and health care.
Oxford Economics Report on the Economic Impact of Legalized Sports Betting: Research Methodology & Assumptions
Oxford Economics’ analysis is based on available data, interviews with industry participants, customized economic impact models and the professional judgment of Oxford Economics. Estimates reflect a future stabilized year of operations, or a representative year in which operators have had time to attract customers and normalize operations and gamers have had time to adapt to the new offerings. Oxford Economics used population and demographic statistics for 2021 as a representative year and prepared the estimates in 2015 dollars. They did not add an additional factor to account for general price inflation in future years. The data in this summary represents analysis conducted for all 50 states for brick-andmortar gaming at casinos plus retail locations. It does not include online (mobile) betting. In developing its estimates of potential legal gaming revenue, Oxford Economics used existing markets in the U.S. (Nevada and Delaware) with legal sports betting as benchmarks. Oxford Economics also considered the estimated size of the illegal gaming market already occurring in the U.S. because it is anticipated that the primary effect of legalization would be to shift gamblers from betting in illegal markets to legal markets. As such, Oxford Economics did not separately estimate an increase or decrease in other forms of gaming with sports betting’s legalization, such as at casinos or lotteries or other forms of spending, as very little sports
betting revenue would represent a shift from other forms of legal betting. Oxford Economics prepared a range of national sports betting revenue estimates for three availability scenarios that reflect the types of locations assumed to offer sports betting. They estimated the total economic impacts in each sports betting scenario, including jobs, income, and tax revenue. Oxford Economics also prepared a range of estimated state-level gaming revenues for each scenario. The study analyzed three potential tax rate scenarios. In each case, the gaming tax rate is calculated as a percentage of gaming revenue 1 and the current federal handle 2 tax of 0.25% is maintained. These tax rates represent the assumed average tax rates across individual states. In other words, some states may be assumed to set higher or lower tax rates. Oxford Economics did not quantify tax revenues related to licensing, such as for operators or employees. Oxford Economics has assumed that sports betting conducted by Native American tribal operators would support compact payments to state governments equivalent to the assumed gaming tax. Oxford Economics also made the simplifying assumption that the federal handle tax would be collected on such tribal operations, though instead this could more precisely be labeled as an assumed federal/ state handle tax, with tribal operations making payments to states as is more consistent with state-level gaming compacts.
1 Also referred to as gross gaming revenue, net win, or GGR, refers to the amount of revenue specifically generated by sports betting and retained by the sports betting operation after payment of prizes. 2 The amount wagered, or amount bet.
