Executive Summary
The legalization of sports betting in the United States has transformed the gambling landscape. But with the creation of new economic opportunities came new policy challenges. Since the repeal of the Professional and Amateur Sports Protection Act in 2018, 38 states and the District of Columbia have legalized sports betting, with 33 of those states also permitting online betting, as opposed to limiting it to retail locations. While legalization has expanded consumer choice and generated substantial tax revenues, concerns about problem gambling and market regulation persist.
Existing narratives suggest that legalized sports betting drives increases in gambling. However, the American Consumer Institute’s analysis of the Bureau of Economic Analysis Consumer Expenditure Survey (CES) data suggests that legal sports betting has not significantly increased overall gambling expenditures compared to states where it remained illegal. In fact, gambling expenditures grew at a slower rate in states that legalized both online and retail sports betting than in states where sports betting remains illegal.
Legal sports betting increases consumer choice but also expands consumer protections and access to resources to the small percentage of those with problematic gambling behavior. Remaining restrictions—such as high tax rates, affordability checks, and advertising limitations—may slow the transition from illegal to legal sports betting.
Rather than heavy-handed federal mandates, state-driven policies that prioritize competition, consumer protection, and responsible regulation will best serve the evolving sports betting industry. Allocating tax revenues to fund problem-gambling treatment programs and educational initiatives can further enhance protections without deterring responsible consumers from participating in legal sports betting markets. By embracing balanced regulatory frameworks, states can maximize economic benefits while ensuring a safe and fair betting environment for consumers.
Read the full report below.