Legal sports betting is currently active in 26 states (plus Washington DC), with more than half of those states having legalized online gambling. Experts such as NBA Senior Vice President of Fantasy and Gaming Scott Kaufman-Ross told SportTechie this week he believed that in five years that number could grow to between 45 and 48 states. .
The profitability of a sportsbook and partner sports teams in these states is not all equal, as some states have much higher tax rates than others.
For example, Pennsylvania has a relatively high tax rate of 36% imposed on all sports betting operators, while neighboring New Jersey taxes 9.75% on retail sports betting and 14.25% on online income. The average statewide sports betting tax rate is currently around 20%.
Chris Grove, partner of a market research firm Eilers & Krejcik Gaming, warned Thursday at SportTechie’s Sports Capital Symposium that states impinging on a quarter-percent tax rate on betting income could hamper the development of the US gambling industry regulated sports – that Grove expects to reach around $ 20 billion in revenue for betting operators this year.
“Once you start to go over 25%, you really start to see the ability of sports betting to spend so aggressively on promotions and marketing start to be limited,” Grove said during the SportTechie roundtable. “Second, the ability of legal sports betting to capture the maximum demand from illegal and offshore sports betting is also limited.”
Of that $ 20 billion in annual revenue generated by sports betting, Grove expects operators to spend around $ 8 billion on customer acquisition and retention through marketing partnerships with sports teams or companies. media platforms, as well as paid media ads on sites such as Google and Facebook. He says that on average, teams should expect to earn between seven and eight figures from marketing deals with a bookmaker.
But the most lucrative aspect of betting for sports teams will come in states that pass legislation similar to Arizona. Copper State teams took gold with Arizona’s decision to let professional teams and sites become licensed sports betting operators. Earlier this month, the Phoenix Suns teamed up with FanDuel to become the first NBA team with a sportsbook in their arena, while both NFL teams Arizona Cardinals and MLB Arizona Diamondbacks plan to open sports betting at their sites in 2022. The Diamondbacks have already opened betting windows at Chase Field.
“We have seen other states [such as] Illinois, Maryland and Virginia give a certain right or an economic advantage to those involved in sport, but Arizona is definitely the model that gives sport the most power. [teams]”Grove said.” If you are in a state that has yet to legalize sports betting, you really want to think of Arizona as your role model when you think about what we want to stand for when drafting this legislation. . “