In the six years following the U.S. Supreme Court’s decision to allow states to implement sports betting, each year has recorded a new high in legal wagering amounts.
By the end of 2024, forecasts indicate that this total could approach $130 billion, which has been accompanied by a challenging year marked by notable scandals.
High-profile incidents have marred the reputation of the sports betting industry, such as the lifetime ban imposed on former Toronto Raptors player Jontay Porter. Following a league investigation, it was revealed that he shared confidential information with bettors and falsified injuries to manipulate betting outcomes related to his performance.
Another troubling case involved Ippei Mizuhara, previously the interpreter for Shohei Ohtani, who admitted guilt in a bank and tax fraud scheme. Prosecutors claimed that he had embezzled nearly $17 million from Ohtani to address illegal gambling debts.
While Ohtani was exonerated of any wrongdoing, the scandal cast a shadow over his image and baseball’s integrity.
John Holden, an associate professor at Indiana University who explores gambling and collegiate sports policies, stated, “The intertwining of sports betting and corruption is inevitable. This was expected as the legalization of sports wagering in the U.S. would not be immune to the issues observed globally.”
At the time of his indiscretions, Porter was on a two-way contract, earning $410,000, and a typical NBA agreement could have exceeded $2 million. He pleaded guilty to federal conspiracy charges, admitting he engaged in these actions to escape significant gambling debts.
NBA Commissioner Adam Silver noted that prop bets, particularly when they can be precisely manipulated, pose unique risks for misconduct within the betting sphere. In response to Porter’s actions, BetMGM announced in October that it would refrain from taking prop bets on players with two-way or 10-day contracts, aligning with other major sportsbooks such as DraftKings and FanDuel.
The long-term implications of these scandals remain uncertain, as noted by Andrew Brandt, executive director of Villanova’s Moorad Center for Sports Law. He remarked that Porter was an “easy” case due to his status as a lesser-known player, implying it served as a warning to others. The relationship between Mizuhara and Ohtani, however, seemed to involve deeper issues concerning trust rather than gambling alone.
These incidents may also have influenced the narrow passage of a sports betting legalization initiative in Missouri, where only 50.05% of voters supported the measure after repeated setbacks in the state Senate. The campaign for legalization saw substantial investment, totaling $43 million—a record for Missouri ballot initiatives—from major operators like DraftKings and FanDuel.
Industry veteran Matt Para observed that the combination of overwhelming advertising and lower-than-expected tax advantages has contributed to a shift in public sentiment towards sports betting. “I sense a growing disapproval regarding sports betting in general,” he said. “People are frustrated that gambling ads intrude on sporting events they enjoy watching with their family. It feels like we’ve reached a saturation point in what the public will tolerate.”
Next year is not poised to welcome any new states into the sports betting market, with significant places such as Texas and California remaining in the wind. In California, attempts to legalize sports betting faced defeat in 2022, with interest groups amassing nearly $450 million to either support or oppose competing proposals.
The Texas Legislature convenes every two years, with the next session starting in 2025. Nevertheless, the state has shown little inclination towards embracing sports betting. Historically resistant to various forms of gambling, the primary hurdle remains Republican Lt. Gov. Dan Patrick, who has considerable influence on legislative priorities. He has voiced skepticism about the potential tax revenues, which he previously indicated would only fund about half a day’s budget for Texas.
Most states impose taxes on sports gambling from 5% to 20%, but revenue generation is inconsistent; only 15 states collect at least 10% of each bet’s proceeds. Research from the Sports Betting Alliance, which represents sportsbooks and professional sports teams in Texas, estimates that the state could garner roughly $250 million annually from sports betting. However, this projection hinges on setting competitive tax rates and capturing substantial gambling revenue.
For California and states such as Oklahoma, the need for negotiations with Native American tribes holding existing gaming rights presents further complications. In California, a compromise appears feasible due to the substantial revenue already generated from its casinos, currently amounting to $9 billion. However, significant legislation in California would likely require a statewide referendum, which can only occur in even-numbered years.
Holden concluded, “While there may be surprise developments regarding sports betting in certain states, overall, the landscape we’re observing faces specific obstacles. I don’t foresee a scenario where several states will legalize betting simultaneously as we’ve seen in the past.”