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How Much Money Are States Without Sports Betting Leaving on the Table?

by Docsports.com - 6/24/2025

  • The 12 states without legal sports betting could collectively generate over $2.19 billion in annual tax revenue if they adopted the national per capita average of $17.15.

  • The largest cities in each non-legal state alone could contribute more than $326 million annually in tax revenue.

  • By comparison, New York is the state that collected the highest amount in 2024 with over $1 billion in sports betting tax revenue .

A new report from Doc's Sports estimates that if the 12 remaining states without legal sports betting were to legalize and tax it, they could collectively generate more than $2.19 billion in additional annual tax revenue.

The U.S. sports betting industry has experienced unprecedented growth since 2018. In just seven years, the total legal sports betting handle skyrocketed from $6.6 billion in 2018 to nearly $149 billion in 2024. 

This explosive activity has generated an estimated $2.83 billion in state tax revenues in 2024 alone, compared to 40 million in 2018. As shown in our projection, that amount would go over $5 billion in 2025 if all states legalized sports betting.

Potential Tax Revenue

Twelve U.S. states currently prohibit legal sports betting. Using a national per capita average of $17.15 in potential sports betting tax revenue, these states could collectively generate over $2.19 billion annually if they legalized sports betting.

 

Potential Annual Sports Betting Tax Revenue  for States Without Legal Sports Betting

The three largest cities in each of these states could together generate over $326 million annually, representing a significant share of their states' potential.

 

Potential Revenue for the Three Largest Cities in Each State Without Legal Sports Betting

Tax Revenue in States With Legal Sports Betting

States with legal sports betting generated nearly $3 billion in tax revenue in 2024, with top performers leading the way in both collection and public allocation.

Top 5 States by Sports Betting Tax Revenue (2024)

  • New York – $1.07 billion

  • Illinois – $342 million

  • Pennsylvania – $342 million

  • Ohio – $210 million

  • New Jersey – $181 million

 

Tax Revenue in States and All-Time Handle for Every State with Legal Sports Betting

States without legal sports betting are missing out on over $2.19 billion in potential annual tax revenue—much of which could be concentrated in their largest cities—while legal states are investing billions in education, infrastructure, and public health through their realized sports betting tax revenue.

Methodology

Data Collection

  • State and City Population Data: Population figures for each state and its largest cities were obtained from the latest U.S. Census Bureau estimates and reputable demographic databases.

  • Sports Betting Tax Revenue: Actual and potential sports betting tax revenue figures were sourced from state gaming commissions, legislative fiscal reports, and industry analyses for both legal and non-legal states.

  • Tax Rate Benchmarking: The national per capita average tax revenue ($17.15) was calculated using aggregated data from states with legal sports betting, reflecting a conservative and broadly representative benchmark.

Revenue Estimation for Non-Legal States and Cities

  • State-Level Estimates: For each non-legal state, potential annual tax revenue was estimated by multiplying the state’s population by the per capita average of $17.15.

  • City-Level Estimates: The same per capita average was applied to the three largest cities in each state, using their specific population figures to estimate potential city-level tax revenue.

  • Percentage Comparison: Each city’s potential revenue was calculated as a share of its state’s total potential, highlighting urban concentration of revenue opportunity.

Revenue and Allocation Analysis for Legal States

  • Actual Tax Revenue: Collected 2024 sports betting tax revenue for all legal states from official state sources and industry reports.

  • Top Performers: Identified the top five states by total tax revenue and summarized their revenue allocations based on state budget documents and legislative texts.

  • Allocation Categories: Tracked how states allocate betting tax revenue (e.g., education, general funds, infrastructure, public health, problem gambling) using government budget summaries and public statements.

Limitations

  • Estimates, Not Projections: Potential revenue figures for non-legal states and cities are estimates based on national averages and do not account for local regulatory, economic, or cultural differences that may affect actual outcomes.

  • Data Variability: Reporting standards, timeframes, and definitions of tax revenue can vary between states, introducing some inconsistencies in cross-state comparisons.

  • Dynamic Market: The sports betting landscape is rapidly evolving, and new legalizations or regulatory changes may impact future revenue potential and allocation strategies.

 

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