The much-anticipated debut of the New York mobile betting market drove sports betting revenue in the United States to record heights in the opening quarter of this year—with potentially even bigger gains to come as more states spurred by visions of tax windfalls jump on board the sports betting bandwagon.
Sports betting revenue in the U.S. hit $1.58 billion in the first quarter of 2022, according to a report released Wednesday by the American Gaming Association, which tracks the commercial gaming industry. That number was up 64.6% year-over-year from the first quarter of 2021, and narrowly surpassed the $1.55 billion of 2021’s fourth quarter as American sports betting’s most profitable quarter ever.
The legal sports betting handle of $26.34 billion in the first quarter was also a record, more than doubling the $13.02 billion wagered in the opening quarter of the previous year. That increase is largely attributed to the addition of six new legal U.S. markets including sports betting in New York, which launched mobile wagering on Jan. 8 and in the first quarter generated $320.9 million in revenue on $4.87 billion in handle—more than some states like Michigan and Virginia generated in all of 2021, according to the AGA.
NY builds on big sports betting debut
New York’s influence on the U.S. market was evident on its launch day, when the geolocation firm GeoComply tracked 17 million hits on betting apps in the state’s first 36 hours of operation. The Empire State immediately established itself as America’s top sports betting market, though fears it would cannibalize neighboring states proved unfounded—New Jersey and Pennsylvania also saw year-over-year gains in the first quarter of 2022, by 34.9% and 25% respectively, the AGA reported.
New York was trailed by New Jersey, Pennsylvania, Nevada, Illinois, Virginia, Michigan, Indiana, Tennessee, Colorado and Arizona in first quarter sports betting revenue, according to the AGA. The expansion of sports betting across the U.S., which began after the Supreme Court struck down the national ban on the practice in 2018, was evident in the AGA report, which tracked just seven sports betting markets in 2019, then 20 in 2021, and 26 in the first quarter of 2022.
Sports betting and iGaming combined for $2.79 billion in revenue in the first quarter of 2022, according to the AGA, and together comprised nearly 20 percent of all U.S. gaming revenue. And the nationwide spread of sports betting shows no signs of slowing as state governments race to legalize the practice to keep bettors—and the tax dollars they generate—within their own borders.
34 states and counting allow sports wagering
That was certainly evident in late April when Kansas legalized sports betting, beating neighbor and rival Missouri to the punch. And Ohio, bordered by four states where sports betting is legal, did the same in late 2021 and by law must launch no later than Jan. 1, 2023. Both Kansas and Ohio hope to debut legal sports betting in time for the 2022 NFL season, which opens Sept. 8.
Ohio, the nation’s seventh-most populous state with nearly 12 million residents, is poised to emerge as a major sports betting market given the presence of three major cities and popular teams like the Cleveland Browns, Cleveland Cavaliers and Ohio State Buckeyes. The Ohio sports betting market could ultimately grow as large as $3.35 billion, according to an estimate made by the state’s Legislative Service Commission.
So the possibility certainly exists for Ohio to add yet another revenue boost to an ever-expanding U.S. market when it launches later this year. Including Kansas and Maine, which legalized sports betting May 2, 34 states have now OK’d some type of legal sports betting. Among the states that could be added to that list in 2022 are Minnesota, Nebraska and Massachusetts, although serious differences remain to be resolved between versions of sports betting bills passed by the Bay State’s House and Senate.