Super Bowl expected to draw $1 billion in legal bets
It could provide a windfall in tax revenue for states that have legalized sports betting.
The American Gaming Association estimates that Americans will legally bet over $1 billion on this year’s Super Bowl, up from $950 million on last year’s championship game, as more states legalize sports betting and it grows more popular.
Over the past year, three states — Kansas, Ohio and Massachusetts — have legalized and launched legal sports betting, and Maryland has begun allowing people to bet using mobile apps, according to the trade group, which advocates for the gambling industry. Lawmakers in eight states are now considering bills that would legalize sports betting.
But it’s hard to say whether Super Bowl LVII, which will pit the Philadelphia Eagles against the Kansas City Chiefs, will pay off for sportsbooks or the 33 states that tax their winnings.
“It all really depends on the outcome of the game,” said Cait DeBaun, vice president for strategic communications and responsibility at the American Gaming Association. “At the end of the day, if there’s a lot of money on the Eagles, and the Eagles win — or vice versa — it could impact what revenue looks like for the sportsbooks.”
State tax treatment of free bets and other promotions offered by sportsbooks also matters. At least six states allow sports betting companies to deduct revenue from promotional bets from their gross gaming revenue, according to the Tax Foundation, a Washington, D.C. think tank. Gross gaming revenue is the overall amount bet minus payouts to winners.
The deductions can make a big difference. Pennsylvanians wagered about $597 million on sports in February 2022, according to the Pennsylvania Gaming Control Board, the state agency that oversees gambling. But more than half of sports betting companies’ revenue that month came from promotional bets.
That meant that rather than owing the state money, Pennsylvania sports betting companies had negative tax liability that month, to the tune of -$150,000.
Pennsylvanians wagered about $68 million on last year’s Super Bowl and will likely bet more this year as the Eagles are playing, said Doug Harbach, director of communications for the Pennsylvania Gaming Control Board.