Sports Betting Revenue: What Drives the Numbers in 2025

By Ruth Okonkwo October 26, 2026

Sports Betting Revenue in the US surpassed $10 billion in 2023, and 2024 is on pace to shatter that mark. But what exactly fuels those numbers? I've spent the last decade tracking state reports and operator earnings, and the story is more nuanced than the headline figures suggest. Here's what actually moves the needle—and why it matters whether you're a bettor or just watching the industry.

How Sports Betting Revenue Is Calculated

Revenue isn't the same as handle. Handle is the total amount wagered; revenue is what operators keep after paying out winners. Most states report “adjusted gross revenue” (AGR), which deducts things like promotional credits and excise taxes. I've found that this distinction trips up casual observers—a state can have a massive handle but modest revenue if hold percentages are low or promos are aggressive. For example, New Jersey's sports betting revenue typically hovers around 6-8% of handle, while Nevada's is closer to 5-6%. Those percentages might seem small, but on billions in handle, they add up fast.

The mechanics of hold deserve a closer look because they explain almost everything else On a standard point-spread bet at -110 odds, the implied hold sits at roughly 4.5%—that's the built-in margin from charging slightly more than even money on both sides. The book doesn't need to pick winners; it just needs balanced action and volume. Straight bets at -110 are the low-margin end of the spectrum. Push into player props, same-game parlays, or futures, and the hold climbs—often into the double digits on SGPs, where correlated pricing and combination math work in the house's favor. When you hear an operator brag about "hold normalization" on an earnings call, that's code for bettors migrating toward higher-margin products. It's also why gross gaming revenue can rise even in a month when handle dips: mix matters as much as volume.

Key Stats: What Drives Sports Betting Revenue

Hold percentage: Typically 5-10% of handle; higher on parlays and futures.
Handle growth: National handle exceeded $120 billion in 2023, up from $93 billion in 2022.
Top states: New York, New Jersey, and Illinois lead in revenue, each regularly topping $1 billion annually.
Promo spending: Operators often reinvest 2-5% of handle into bonuses, temporarily suppressing revenue.
Tax rates: Vary widely—New York charges 51% on mobile revenue, Nevada just 6.75%.

These figures aren't just trivia. If you're betting, understanding hold helps you see why bookmakers profit long-term. If you're an investor, tax rates and promo strategies are the real story behind the bottom line.

One number worth internalizing: the theoretical house edge compounds with every bet you place. A 5% hold doesn't mean you lose 5% per session—it means that on average, across all players and all wagers, the book retains about five cents of every dollar wagered. Individual variance is enormous, which is exactly why the model works at scale. Compare that to casino games, where published RTP figures (slots often land around 96% on paper, table games vary) give players a clearer long-run benchmark. Sports betting hides its margin inside the odds, which is why line shopping matters more here than almost anywhere else.

State-by-State Revenue Trends

Not all states are created equal. New York, with its 51% tax rate, generated over $1.5 billion in revenue in 2023 despite launching mobile betting only in January 2022. That's a testament to volume—the state's handle routinely exceeds $1 billion per month. Meanwhile, Pennsylvania and Michigan consistently rank in the top five, thanks to mature markets and competitive promo environments. I've noticed that states with higher tax rates often see fewer operators, which can reduce competition and eventually lead to higher hold percentages. That's a trade-off regulators don't always anticipate.

Illinois offers a useful case study in how tax structure shapes a market. The state moved to a progressive tax on sports betting revenue a few years back, with rates scaling upward as revenue grows—a structure operators publicly warned would chill investment in promos and odds boosts. Watch what happens to hold and promotional spend in the months after any tax change; historically, books respond by trimming generosity rather than exiting outright. Ohio and Massachusetts, both relative newcomers, launched into crowded fields and had to buy market share with aggressive welcome offers, which suppressed early revenue reports even as handle looked healthy. The pattern repeats: launch-year promos, a shakeout, then hold settling upward as the promotional arms race cools. For bettors, the sweet spot is usually 12-24 months post-launch, when competition is still fierce but operators have stopped lighting money on fire.

What Operators Don't Tell You About Revenue

Sports betting revenue is often presented as a sign of healthy competition, but the reality is more complex. Operators frequently report “net revenue” after deducting marketing costs, which can mask the true profitability of sports betting. In earnings calls, executives rarely break out sports betting revenue from casino revenue, making it hard to gauge standalone performance. the rise of parlay betting—where hold percentages can exceed 20%—has boosted revenue without necessarily increasing handle. After testing various bet types, I've confirmed that parlays are the engine behind many operators' revenue growth, even if they're not the most popular bet type.

Another blind spot: the gap between reported revenue and actual cash flow. State AGR figures deduct promotional credits, which flatters the numbers during heavy promo periods—the state collects tax on less than what bettors actually lost. Promo credits are a real cost to operators but an invisible one on many dashboards. That's why two books with identical handle can post wildly different revenue lines depending on how much of their acquisition budget runs through credits versus cash. When you read a state report, check whether it's gross or adjusted; the difference can be several percentage points of hold in a competitive month.

The Impact of Promotions and Bonuses

Those generous sign-up bonuses? They're not free money—they're an investment. Operators typically spend 2-5% of handle on promotions, which temporarily reduces revenue but attracts new customers. I've seen states like Colorado where aggressive promos kept revenue growth flat for months despite soaring handle. The key is sustainability: once promos taper off, revenue tends to climb as hold normalizes. For bettors, this means the best time to sign up is during promotional periods, but always read the fine print—rollover requirements can eat into your winnings.

Player Tips: Getting Value From the Numbers

Shop lines across at least three books. A half-point on a spread or a few cents on a moneyline compounds over a season. Revenue reports tell you which operators run lean holds—generally the ones competing hardest for volume.
Treat parlays as entertainment, not value. With holds that can exceed 20% on same-game parlays, they're the most expensive bets on the board. If you play them, size them small.
Time your sign-ups around promo cycles. Welcome offers and odds boosts cluster around NFL season and March Madness. Read rollover terms before depositing—a 10x rollover at low odds is worth far less than it looks.
Use state revenue reports as a shopping tool. They're public. A book with consistently high hold in your state is telling you something about its pricing.
Avoid betting into high-margin markets casually. Futures and prop bets carry bigger edges for the house than sides and totals. Know which side of the margin you're on.
Set a budget in cash terms, not units. "I'll bet $50 this weekend" beats "I'll bet five units" every time for keeping discipline.

FAQ: Sports Betting Revenue

What is a good hold percentage for sportsbooks?
Most sportsbooks aim for a hold between 5% and 8% on straight bets, but parlays can push it higher. Anything above 10% is considered strong, though it varies by market.

Which state generates the most sports betting revenue?
New York leads by a wide margin, consistently generating over $1 billion annually. New Jersey and Illinois follow, but New York's high tax rate and massive population give it a clear edge.

How does sports betting revenue affect my odds?
Higher hold percentages mean worse odds for you. If a book holds 8%, you're paying more in vig than at a book with 5% hold. Shopping around for lines is crucial.

Before you place your next bet, check your state's revenue reports—they're public and can reveal which books have the highest hold. That's a concrete way to find better value. And remember: sports betting is entertainment, not a money-making strategy. Set a budget, stick to it, and never chase losses. If you or someone you know has a gambling problem, call 1-800-GAMBLER. 18+ only.