States raise billions from sports betting taxes while bettors see little price change
A University of Chicago study finds that state governments collected over $3 billion in sports betting taxes in 2025 without significantly raising costs for individual gamblers.
Tax revenue reaches new heights
More than three dozen states have legalized sports betting since the federal ban was struck down. In 2025, these jurisdictions collectively raised more than $3 billion by taxing sportsbooks. This growth follows a period where Americans wagered over $165 billion on sports annually.
Burden falls on operators
Researchers found that the current tax structure places the financial burden on sportsbook profits rather than bettors. Consequently, individuals may barely feel the impact of these heavy state taxes when placing wagers. The study argues this approach is an efficient way to generate revenue for state coffers.
Debate over lottery impact
Some debate exists regarding how much legal sports betting cannibalizes spending on state lotteries. Policymakers must weigh the increased state revenue against potential social harms associated with gambling. The top-line figures for tax collection remain significant despite these ongoing discussions.
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