Will sports betting help the economy?

Sports betting is at an all time high right in Las Vegas, with a record $1 billion being bet on MLB baseball this past 2016 season. The football season isn’t finished, but it is on pace to break records as well.

Last year “only” $1.6 billion was bet on football (both NFL and college football), and baseball is usually a fraction of the football betting action, so we can assume that football will soar over the $2 billion mark this year.

To compare baseball betting to football betting – the sportsbook won $30 Million on football bets in October 2016, while they won just $4 Million on baseball bets. Although this was in the baseball postseason where there are less games to bet on, it shows how big of a difference there is for the sportsbooks between the two sports.

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The big problem here is that there are billions of dollars being bet illegally in offshore sportsbooks that the US isn’t making taxes on. While $1 billion was bet on baseball this season, ESPN is estimating that $55 billion was bet on baseball worldwide, including US citizens betting at illegal sportsbooks.

If you think that number sounds high, there are estimations that $500+ billion is being bet on sports around the world each year, with a lot of that being done by US citizens offshore, where the US doesn’t collect taxes on the companies operating the sportsbooks.

This opens up a big discussion on whether sports betting should be legal in every state, and not just Nevada. While many professional sporting leagues were against sports betting in the past, many of the commissions are warming up to the idea – with NBA’s Adam Silver publically talking about how he thinks it could be good for sports.

Most recently the MLB may be changing it’s stance on sports betting as they had a 2 hour sessions at their 2016 winter meetings about how sports betting can help the game and what can be done to prevent and detect any type of game fixing. Of course, game fixing is the biggest issue with sports betting, but if they can use measures to prevent that it would be a no brainer for the leagues to be behind sports betting.

Sports betting is not only great for the economy because of the taxes the government will be collecting that is currently going to other countries, but it’s also great for the sports leagues to increase viewership.

Fantasy sports sites such as DraftKings and FanDuel are becoming increasingly popular, and it is being regulated in many states now. Not only is this helping the viewership numbers for those professional sports, but government is making good money on the taxes from the large amount of “rake” the fantasy sport contests take from the contests. For example, there are contests with over $5 million in prizes running often on these fantasy sites, and they collect 10-15% of that amount in revenue per contest.

In conclusion, it’s silly that we are now in 2016 and sports betting is not legalized country wide. People are using the Internet to place these bets regardless, and the US government is missing out on a lot of tax money that they could be keeping in the country. The sports leagues will benefit as well, and should be behind the push to legalize betting to help the economy.