US Sports Betting Revenue and Handle

New Report Details States Betting Big Relative to Income

New York generates the most tax revenue from sports betting of any state in the U.S. Nevada, however, has the most risk-tolerant population. Residents of Nevada spend the highest fraction of their income gambling on sports each month across all age ranges.

Below, we’ll be analyzing sports betting trends by state, covering the states that spend the most on betting and the states that generate the most tax revenue thanks to gambling.

Percentage of Income Spent on Betting

Nevada residents spend the highest percentage of their income betting on sports—a staggering 23.7%.

Not only is Nevada in the top position in terms of income spent on online sports gambling, but it outstrips the next closest state by a significant margin. New Jersey residents spend the second-highest percentage of their income on betting, but it’s only 6.3%. That’s a tremendous dropoff from Nevada, where nearly a quarter of every resident’s income goes toward betting on sports events. It’s another two percentage point dropoff to the third-highest state, Indiana, where the average fraction of income spent on sports betting is 4.6%.

Residents under 25 years of age spend the highest fraction of their income betting on sports out of all age groups in every state. In Nevada, people under 25 spend a massive 34.5% of their income. New Jerseyites 25 and under spend 11.4%, and young Hoosiers just 8.1%.

The percentage of income people spend wagering on games tends to decline with age in every state. Using Nevada as the primary example, people ages 25 to 44 spend 21.3% of their income on sports betting, and people 45 to 64 come in at 19.1%. Retirees 65 and older spend 28.3%, which bucks the trend. It’s possible that older people are drawn to sports betting in an attempt to generate income once they stop working.

Gambling Provides a Significant Tax Income for New York

Interestingly, New York, not Nevada, generates the most tax revenue from gambling on sports, an astronomical $643 million in 2022. The next-highest state is New Hampshire, which only brought in $31 million in betting tax revenue in 2022, just a twentieth of New York’s numbers.

Even when accounting for population, New York is solidly in first when it comes to tax income from gambling on sports. New York has a much higher population than New Hampshire, but the Empire State’s betting tax revenue per person 21 and older was $47.59, while New Hampshire’s was $35.36. This is a much closer comparison, but New York is still about 50% higher in sports gambling tax income.

Rhode Island rounds out the top three with $33.59 of tax income per person from wagering on sports. Nevada comes in a surprising fourth place with just $21.48 generated per person and a total tax revenue of around $30 million.

There’s also not a direct correlation between average income and sports gambling revenue per capita. The median income in New York between 2017 and 2021 was $70,663, which puts it in 14th place. New York, however, does have a higher fraction of high-income people than most other states, which helps explain how it generates so much tax income from betting.

Another contributing factor is New York’s 51% tax rate on online betting income. Nevada’s online betting tax rate is just 6.75%, and most states keep their rates below 20%.

Wrapping Up 

Nevadans spend the highest fraction of their income on sports betting, but New York still generates the most tax revenue from it, partially because of its 51% tax on online betting income. Overall, this analysis shows that high tax rates on online sports betting don’t dissuade people from participating, which means we could see more states follow New York’s lead in a bid to boost their tax revenues in the coming years.

Sports Betting Revenue

Sports betting revenue refers to the total amount of profit generated by a sportsbook. This can be broken down by month, by year, or whatever period of time you would like to see. Sports betting revenue is determined after bets are settled, by subtracting the amount the sportsbook pays out from the total amount of money wagered on that specific event.

The United States as a whole has generated significant sports betting revenue since sports betting became legal. The US had a sports betting revenue of $7.56 billion in 2022 per Statista and is projected to exceed that number again in 2023.

Sports Betting Taxes

Sports betting taxes are a crucial part of the industry and it is important to note that every state has a different sports betting tax rate. This can range anywhere from 0% to 37%. Some of the factors that can determine this are the other income you have and filing status.

Bettors have to pay sports betting taxes because winnings from gambling are considered taxable income by the IRS. Like any other income that you have to report and pay taxes on, sports betting taxes can be used to provide benefits such as Infrastructure, National Defense, Veteran Benefits, Health Care and Education.

Sports Betting Handle

Sports betting handle can be defined by the total number of money wagered by bettors. An example of a specific bet would be if 75% of the money is on the Atlanta Braves money line when they are playing the New York Mets, it means that three-quarters of all the money being bet on the money line is on the Braves to win the game. Since June of 2018, the United States has a total sports betting handle of roughly $240 billion per Legal Sports Report. 

State Handle Per Capita: Which State Has The Biggest Bettors? 

Handle per capita simply means how much each person is betting. This can help determine which states have the biggest sports bettors. In recent years, Nevada sports betting handle per capita peaked at $779.89 in October of 2021. This is essentially saying that every person who was betting an average of $779.89 during that month. Handle per capita can vary month to month depending on which sports are in season. As recently as May 2023, Nevada had a handle per capita of $373.54.

Other states with a high handle per capita include New Jersey (peaking at $223.56 in January of 2022), Arizona (peaking at $195.40 in March of 2022), and New York (peaking at $133.21 in January of 2023). One state that has a surprising low handle per capita is Ohio. Ohio just introduced sports betting in January 2023, starting strong in that month with a $139.66 handle per capita. However, it has dipped since then, most recently being clocked at $56.10 in May of 2023. 

Sports Betting Hold

Sports betting hold is defined by the percentage that a sportsbook keeps in profit for a specific bet. This essentially is the tax a bettor will pay for making bets.

Sports betting hold can vary month to month based on betting results. Say for instance, the month of September in the NFL sees favorites winning almost every week. This would lower the sportsbooks’ sports betting hold because bettors love to bet on favorites in the NFL, especially when it comes to building teasers and parlays.

Sports betting hold can also vary between sportsbooks because they tend to offer different odds on games. A money line favorite of -175 at DraftKings could be something like -170 at FanDuel and -180 at Caesars. The difference in odds could change how much the sportsbooks make, which can add up to be a significant difference over a long period of time.

Data Methodology

State betting revenue and handle data is sourced from publically available state revenue reports published by the local gaming commissions. Handle per capita is an estimate based on the total state handle, divided by the total population of 21+ adults in that state. State population assumptions based on Infoplease US Census data.