Sports Betting Revenue: How States and Operators Split the Bill

What Is Sports Betting Revenue, Anyway?

Sports betting revenue is not the amount people wager. The handle is the total amount bet. Revenue—also called gross gaming revenue (GGR)—is the difference between what bettors put in and what they get back. If $100 million is wagered and $92 million is paid out, the sportsbook's revenue is $8 million. That's the number states tax and investors watch. It's also the number that separates the industry's hype from its actual health.

I've seen plenty of headlines hype the handle. In 2023, Americans wagered roughly $120 billion on legal sports. But that number is mostly churn—money moving back and forth. The revenue figure is smaller and far more meaningful. It tells you how much the industry actually earned.

How Do Sportsbooks Keep Winning If Bettors Win Too?

Because they don't need to win the bet—only the margin. The standard bet is -110 on both sides. That means you need to win 52.38% of your bets just to break even. The sportsbook is charging a fee on every outcome. Over thousands of bets, that built-in vig adds up.

• Hold rate (GGR/handle): The percentage of every dollar that stays with the book. Most U.S. online sportsbooks hold between 6% and 10%.
• Parlays: These are the money printers. The combined odds often carry a margin of 20% or more, even if individual legs are fair.
• Niche markets: Player props, in-play bets, and futures usually have higher margins than standard sides and totals.

Here's what surprised me: a sportsbook can lose money on a single game—say a massive public bet on the favorite—and still crush its revenue in the same month. The margin, not the outcome, is the business. It's also why those same-game parlay offers are everywhere—the hold rate on them can hit 20%.

Why Do Some States Bring In More Revenue Than Others?

Population matters, but market design matters more. New York, for example, brought in over $1 billion in sports betting revenue in its first full year after mobile launch. That's partly because the state has 20 million people. It's also because New York taxes revenue at 51%, the highest rate in the country.

New Jersey, the first state outside Nevada to make sports betting legal, has a more moderate 13% tax on revenue. California still hasn't legalized it. Texas hasn't either. So the revenue map doesn't match the population map perfectly. It matches the regulatory map.

I've looked at state-by-state reports since 2018. The pattern is consistent: states with legal mobile betting and reasonable tax rates grow fastest. States that force in-person registration or set tax rates above 30% still generate revenue—but less of it, and often from a smaller set of operators. Florida is the outlier—its compact with the Seminole Tribe keeps the market under different rules, but the revenue numbers have still been massive since launch.

What Does the Tax Revenue Actually Pay For?

State tax revenue from sports betting is a drop in the bucket compared to broad state budgets. But it's not nothing. New York collected hundreds of millions of dollars in 2023 from sports betting taxes. Ohio, with a 50% tax, saw over $200 million in tax revenue in its first year. Pennsylvania and Illinois have used sports betting tax money for property tax relief and infrastructure.

The key distinction: states tax revenue, not handle. If a state tax is 51%, a book that holds 8 cents on every dollar pays about 4 cents to the state. That eats into profits, which is why operators in high-tax states often offer worse odds and more aggressive limits. You're paying the tax one way or another—sometimes at the counter, sometimes through the line.

How Can Bettors Use Revenue Data to Sharpen Their Strategy?

Stop betting against the revenue report. Check the hold rate of the sportsbook you're using. If a book's hold is consistently over 9%, it's taking more out of every dollar than the industry average. That shows up in how much value you get on straight bets and props.

I like to compare two things: the headline hold rate and the hold rate on parlays. If a book makes 20% on parlays and 5% on straight bets, the house is deliberately steering you into the worst product. Avoid the 10-leg parlay. Stick to single bets or two-leg parlays when you have a real edge. Most states publish this data monthly.

One common mistake I see every week: chasing betting revenue as a side income. The revenue numbers look huge—$10.9 billion in 2023—but that's across tens of millions of bettors. The average recreational bettor loses somewhere in the low hundreds per year, and the biggest winners are a tiny minority. If you're betting to beat the house, you're doing it wrong. Use the hold rate as your warning light.

Sports Betting Revenue FAQ

Is sports betting revenue the same as profit? No. Revenue is before operating costs like bonuses, salaries, marketing, and taxes. A book can report high revenue and still lose money because it spent heavily on customer acquisition.

Which state gets the most sports betting tax revenue? New York has led since mobile betting launched in January 2022, thanks to a 51% tax on revenue. New Jersey and Pennsylvania are also consistent leaders. Handle totals don't matter as much in this ranking—tax rate and hold rate do.

Do higher hold rates mean worse odds for bettors? Usually, yes. A book that holds 10% is pricing in more margin than one holding 6%. Over time, that difference compounds into less money in your pocket.

If you're 18 or older and you decide to bet, treat your betting account like any entertainment budget. Set a monthly limit before the first bet, and use the sportsbook's profit-and-loss report to see exactly what you're spending. The same revenue data that defines the industry is available to you—use it to know when to stop, not just when to bet.