Upcoming States: First Year Online Sports Betting Handle & State Tax Revenues 

To calculate the First-Year Online Sports Betting Handle & State Tax Revenues for the states below, AmericanGambler.com took New Jersey as an example/benchmark. We looked at the NJ online sports betting handle/revenue for the 21 months (June 2018-Feb 2020) prior to COVID-19 being declared as a pandemic to find out the average sportsbooks margin (7.7%).

We also looked at each state’s population, size and the tax percentage on online sports betting in NJ in order to calculate the average 12-month handle volume. We use this methodology to predict betting revenue and tax revenues per state based on the state’s own tax rate and population.

AmericanGambler.com took the Illinois Gaming Board’s report on the number of signups for the first legal online sports betting month (July 2020) and found it is 2% of the population ready to sign up when the state opens for betting business.

We then projected the same data to new opening states to calculate the expected number of people who will sign up with the online sportsbook during the first month of legal online sports betting.

Based on this data, we know 50% of those who signed up will place a bet (deposit real money), so we can assume how many people will actually make real-money bets in the state per day during the first month.

First Year Sports Betting Handle & State Tax Revenues 

State

Population, mln

Betting Tax

Handle, mln*

Rev Sports, mln**

Tax Rev, mln***

NJ

8.8

13

3868

265.2

34.5

Tennessee

6.8

20

2989

205

41.0

Ohio

11.7

10

5143

353

35.3

Virginia

8.5

15

3736

256

21.8

Michigan

10

8.4

4395

301

30.1

*Average handle based on June 2018-Feb 2020 (21 months) online sports betting handle data in NJ, prior to COVID-19

**Average sportsbook revenue is 7.7% – based on data from the past 21 months of betting in NJ. 

*** Annual state online sports betting tax revenue =  average annual sportsbook revenue / 100 x state online sports betting tax %

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