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As of Aug. 9, our ����žž experts forecast the U.S. online sports-betting market to be worth $24.2bn to $27.8bn in total annual gross revenue by 2028, depending on whether legislative trends align with our base-case or (more optimistic) bull-case scenarios. Meanwhile, we forecast total gross revenue from all U.S. online gambling (online sports betting, plus iGaming in certain states) to reach $38.2bn to $41.8bn by 2028.

In our monthly U.S. Sports Betting Outlook reports, we highlight how key areas of state and federal policymaking on sports wagering are evolving. In this blog, we highlight some of the key post- Professional and Amateur Sports Protection Act (PASPA) policy trends and points to watch.��

DraftKings Surrenders To Surcharge Backlash��

Just 12 days after announcing plans to enact a new surcharge on winning players in high-tax jurisdictions that included New York, Illinois and Pennsylvania, DraftKings reversed course and scrapped the plan on Aug. 13 after numerous competitors, including chief rival FanDuel, confirmed they would not follow suit with surcharges of their own. DraftKings CEO Jason Robins said in announcing the surcharge that he believed other operators would indeed enact their own surcharges, but no other company took the bait, with Flutter most notably saying that it would simply cut marketing costs in response to tax increases in Illinois rather than surcharge winning players. The plan also had yet to pass scrutiny from regulators in the three key states, who issued brief statements to ����žž acknowledging that they were reviewing the surcharge proposal, but had yet to weigh in on how such a proposal would be taxed or whether there was anything in state laws or regulations that prohibited such a charge. While DraftKings said it preferred the more “transparent” approach of the surcharge to other austerity measures like worsened odds or marketing cuts, the still-competitive sports-betting market ultimately forced the company to seek other paths to improving margins that have been hit by higher tax rates.

Tax Rise Risks Not Fading Away

The consensus view of expert speakers on a ����žž webinar last month was that additional states will inevitably weigh whether to increase their tax rates on sports betting in the coming months and years, following the recent moves in that direction made by Ohio and Illinois. Still, the dynamics of every state will be different, with OH and IL (as well as Tennessee) all motivated by different reasons when changing their tax rates over the past 12 or so months. One lesson learned from IL is that the industry faces an uphill battle to avert an increase whenever a state governor or legislative leadership proposes to do so, particularly as part of a broader budget package. Nonetheless, operators and industry groups will look to make the case that tax increases hurt not just sportsbooks themselves but also land-based casinos with whom they have market-access partnerships, with offshore operators such as Bovada the inevitable beneficiaries of averse policy changes and iGaming a far more lucrative alternative for states to consider if revenue raising is their primary aim.

New Jersey DGE Putting Emphasis On Enforcement

Twice in June and July, the New Jersey Division of Gaming Enforcement imposed six-figure penalties as part of settlements with DraftKings for inaccurate reporting of sports wagering revenue data, and with bet365 for revising odds on placed bets without regulatory approval to do so. The two actions are not the first six-figure penalties to be imposed by the DGE against a sports betting operator. However, letters confirming the two settlement agreements strike a harsher tone by variously referring to the companies’ actions as “gross errors and failures”, “unacceptable conduct”, and “serious violations [that] cannot be tolerated”, while also warning

of stricter penalties in the event of future offences. The two actions in quick succession follow the appointment of a new interim director of the DGE in early March; will they mark the start of a trend towards a tougher enforcement environment in NJ in general?

Market Access Excess

Just three years ago, paying a premium to secure market access via casinos or other stakeholders in key U.S. states was seen as a strategic imperative for operators of all sizes. Today, it is clear that supply clearly outstrips demand in all but a very small handful of markets, as both international and domestic operators continue to throw in the towel in the fight to pick up whatever market share is left over by the increasingly dominant duo of DraftKings and FanDuel. Betway, Betfred and Superbook all recently announced their intentions to leave key U.S. states, if not the market as a whole, following similar moves made by evoke/888, Kindred, Tipico and Wynn, among others. There are still some takers for those operators’ market access spots, at least, with the Arizona Department of Gaming confirming in early August that betting exchange Sporttrade and sharps-centric Prime Sportsbook had successfully applied for licences vacated by Kindred and Wynn.

Sports Betting Special In Nebraska

After Gov. Jim Pillen called a special session of the state’s legislature to seek revenue generating ideas to reduce property taxes, one potential fix put on the table was legislation to permit mobile sports betting in the state through licensed racinos that are already authorised to offer retail sportsbooks. Pillen said last month that he would introduce his own mobile sports-betting legislation during the 2025 regular

session as a “priority bill,” but whenever the bill is passed, a constitutional amendment is expected to be required. Passing the bill during the special session would potentially allow for a ballot measure to be placed on this November’s ballot rather than having to wait until Nov. 2026 to allow voters to weigh in. While the prospects for the special session bill, Legislative Bill 13, are still unclear, with backing from a governor who is traditionally opposed to gambling expansion and whose party

controls the unicameral legislature, the issue will certainly be heard both this year and next and be given every chance to succeed.

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Want to keep reading?

This blog is just a small glimpse of what’s inside our August 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.