Legalized sports gambling was argued for by the states because of one major reason: tax benefits. If Delaware’s first day of legalized sports gambling is a sign of things to come, expect multiple states to push through a law that allows people to wager on sports. One the first day of betting, there was $322,135 was wagered.
It’s a little early for projections, but according to the ESPN report above, “Research firm Eilers & Krejcik Gaming projects the annual amount bet on sports in Delaware could be in the range of $350 million to $760 million if online wagering is implemented fully.” That’s a lot of money, and that’s good news for the state of Delaware.
Each state is different, but states can win on taxing gambling in two ways. First, there’s a tax on the casino’s revenue. That’s 43 percent in Delaware according to this report. Second, any winnings can be taxed as well. If someone makes money betting on sports in Delaware, they are going to have to pay Delaware a tax on their winnings.
Vice taxes are a simple way for states to make up deficits. Legalized sports gambling was always there for the taking. It just took this long to battle against the leagues’ complete avoidance of what was already happening on the black market to take advantage of the potential tax revenues.
Things could change as the major leagues in the United States fight for a federal framework and search for ways the leagues can benefit. The talk of an integrity fee has hit a bit of a wall, but the major leagues in the U.S. are smart. They will find a way to get in on the action — pun intended.
For now, everyone can see the benefit of legalized gambling. The first-day handle — total amount bet — is a pretty large number. That’s without online gambling which will help make it easier to bet on games. Of course, the novelty will wear off. It’s not like Delaware can expect that much to be bet every day or maybe even every week. People will change their habits once they get used to betting — or once they start figuring out how difficult it is to actually win money.
Many states were already considering moving quickly to enact legalized gambling for the tax benefits. Delaware’s decision could make things move even faster. That means the leagues really need to pressure Congress for a national framework. Otherwise, the leagues will be stuck with dealing with multiple different state laws. Negotiations for their integrity fee or other involvement will become more difficult as well.