The U.S. sports betting market is an extremely lucrative market, despite restrictions in many states. Projections estimate the market value in 2030 could be worth almost $300 billion, with a compound annual growth rate of 9.2%.
How the market develops in the forthcoming years will be dependent on the states that don’t currently allow sports betting and the development in the ones where agreements are in place.
A big factor to consider in the U.S. sports betting market is the impact of tribal-state compacts on gambling in the country.
Sports Betting in the U.S.
All betting in the U.S. is determined by state legislation. This means that each state has the autonomy to legalize different types of gambling, including in-person, online, casino, and sports betting.
Until 2018, sports betting was only available in Nevada. A Supreme Court ruling changed this and now sports betting has been legalized in 34 states as well as the District of Columbia. However, not all of these states permit online gambling.
The revenue potential for state governments that permit sports betting is tempting for many and several bills have been put forward with strong support. However, Hawaii and Utah are two states that don’t allow any betting and this is unlikely to change any time soon.
As well as authorized sports betting online and in-person, tribal sports betting is another consideration.
Tribal-State Compacts
Tribal-state compacts are agreements in place for American Indian tribes to operate casinos and sports betting facilities in certain states. This can often be due to exclusive gambling rights that were in place before the relaxation of rules in 2018.
The Indian Gaming Regulatory Act of 1988 (IGRA) states that sports betting requires a tribal-state compact to be agreed upon.
One of the most highly publicized compacts in recent years is the agreement between the state of Florida and the Seminole Tribe. The agreement was put on hold in 2021 by a federal Judge before the recent decision to overturn that. This now means that the State of Florida and the Seminole Tribe are free to commence sports betting operations.
The compact gives the Seminole Tribe control over roulette and craps at their casinos and online sports betting. It will also allow a further three casinos to be built on tribal property.
The state will benefit from at least $2.5 billion in the first five years and has the potential for unprecedented revenue across the pact’s three decades.
But, there is still the risk that the decision could be appealed. This would be a setback for the tribe and could delay a return to sports betting in the state. Gamblers will be waiting with baited breath for more news, however; Florida betting landscape updates will be big news for people in the state and could have ramifications for other states that are in the process of launching sports betting operations.
The Hard Rock Sportsbook was initially launched by the Seminole Tribe before it was stopped shortly afterwards in 2021. The potential to relaunch the app to provide Floridians with the means to place bets on sports quickly is available, but we’re still waiting to find out exactly when this will take place.
This is great news for the people of Florida, with 72% originally voting to legalize sports betting in the state.
While this may seem like good news for everyone involved, the emergence of the online betting market and the effects of COVID-19 on in-person betting have seen tribal operations lose their advantage.
Some tribes have partnered with large betting operators to make the most of the online and in-person market. This has resulted in a greater choice for gamblers in the state.
Tribal Sports Betting States
Of the 22 states that have authorized and operational tribal sports betting operations, only 5 have granted exclusive rights to in-person retail betting. These are New Mexico, North Carolina, North Dakota, Washington, and Wisconsin.
States that allow tribal and other sports betting operators include:
- Arizona
- Colorado
- Connecticut
- Florida
- Indiana
- Iowa
- Kansas
- Louisiana
- Maine
- Michigan
- Mississippi
- Montana
- Nevada
- New York
- Oregon
- South Dakota
- Wyoming
Minnesota almost legalized sports betting in 2022, but this failed to transpire. Tribal gaming compacts in Minnesota are heavily stacked towards the tribes with no requirement to pay the state.
With the potential to make billions from sports betting a possibility, tribes may be more flexible when dealing with the state to try and encourage legislation.
Conclusion
Sports betting revenue in the U.S. is worth billions to individual states and tribes. Those that already have operations in place will look to capitalize on the growing market.
States like Florida will be keen to get things moving to ensure they can start to enjoy the financial benefits of their compact with the Seminole Tribe.
The legalization of online sports betting could challenge the hold that tribes have on gambling, and offshore betting options that see money leaving the state will also have an impact.
More states are sure to follow suit in legalizing sports betting options to make the most of revenue streams and try and halt the flood of gamblers using offshore accounts.
