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As of March 8, 2024, sports betting is live or regulated in 39 states, legislation to authorise sports betting is currently pending in six states, and legislation to expand or reform existing state laws is currently pending in 14 states. We forecast the U.S. sports-betting market to be worth $22.4bn to $25.8bn in total annual gross revenue by 2027, depending on whether legislative trends align with our base-case or (more optimistic) bull-case scenarios. 

In this blog, we dive into some of the key developments in March.

Mobile Sports Betting Goes Live in North Carolina

Following its March 11 launch, North Carolina’s mobile sports betting market is set to become the 11th largest in the U.S. by 2027, according to ����žž forecasts. NC will quickly join the cluster of second-tier markets that will be worth in the region of $500m to $1bn in annual revenue, with the potential to approach the top-end of that range by its fifth full year of operations. The Tar Heel State will also be a bellwether of sorts for the broader competitive landscape in 2024, with ESPN Bet and Fanatics able to launch at the same time as more established rivals FanDuel, DraftKings, BetMGM and Caesars.

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Tax Rise Risks Rising?

If you had to pick one state as the most likely to propose a tax increase on sports betting, Illinois would have been a safe bet based on its history of budget deficits and track record of

raising taxes on land-based casinos. True to form, on February 21, Governor J.B. Pritzker’s executive budget proposal called for the state’s tax rate to more than double from 15% to 35%, with the Democratic governor citing a desire to more closely align IL’s rate with that of its peers in the sports betting market (read: New York).

It remains to be seen whether Pritzker’s budget proposal will be approved by lawmakers as-is, with the industry sure to lobby for a more modest increase as well as an alternative revenue raising plan to instead expand IL’s online market by legalising iGaming. Also uncertain is how many states might similarly seek to raise their own tax rates in future years motivated by a potential combination of factors that may include NY’s lucrative tax-revenue haul, the higher-margin nature of the U.S. sports wagering market versus initial projections, state budgetary needs, and political and public disquiet over advertising or concerns of responsible gaming. The latter factor was the stated reason behind Ohio’s move last year to double its sports betting tax rate, and has also undeniably been a driving factor behind tax increases on online gambling in various European markets in recent years.

It should be noted that states have not all taken the same approach to tax policy for land-based casinos. Whereas Illinois, Maryland, Pennsylvania and other states have adjusted their casino tax rates over the years, others have stuck with their initial rates regardless of their budget situations and the competitive landscape.

College Prop Bet Backlash Continues

We’ve been tracking the growing backlash among state regulators against proposition bets on individual collegiate athletes amid concerns over online harassment of student athletes. That increased attention, spurred by lobbying from the National Collegiate Athletic Administration, has only intensified in recent weeks, as first the Ohio Casino Control Commission decided to prohibit the bet types and then the Maryland Lottery and Gaming Control Commission and Vermont Lottery followed suit shortly thereafter. In addition, both chambers of the West Virginia legislature have passed a new law that gives the state’s lottery commission authority to ban players from betting if they display a pattern of harassment against athletes. That bill is awaiting the signature of Governor Jim Justice.

U.S. Market Exodus Continues

888 and Betway became the latest operators to signal a retreat from the U.S. online sports-betting market in March, as 888 terminated its Sports Illustrated brand partnership and initiated a strategic review of its U.S. operations and Betway owner Super Group revealed that it is “not pleased with the status quo” and is “actively evaluating” its U.S. strategy on a state-by-state basis. Smaller operators, many of whom struck expensive market access deals to originally enter key state markets, have become increasingly squeezed in recent years amid heavier concentration of power towards the top end of the market. Operators outside of FanDuel and DraftKings controlled a combined 22.4% of market-wide online GGR in 2023, down from 34.2% in 2021, while operators outside of the current leading eight garnered a combined market share of just 1% in Q4 2023.

Want to keep reading?

This blog is just a small glimpse of what’s inside our March 2024 Sports Betting Outlook, a monthly report which maps out how the U.S. sports betting landscape is being redrawn after the May 2018 Supreme Court ruling allowing all states to regulate wagering. It allows ����žž customers to compare state laws and key pending bills, identify policy trends and accurately forecast the size and scope of the market both in terms of anticipated legislative developments and projected revenues by participating states.

Get in touch or book a demo with a member of the ����žž team, who can show you how your organisation can use the ����žž GamblingCompliance platform to stay abreast of the U.S. Sports Betting’s regulatory landscape.