Share 
Legal sports betting has expanded to 39 states and Washington, D.C. As of October 2026, 33 of those states offer online betting. The growth comes eight years after the Supreme Court’s decision in New Jersey’s Murphy v. NCAA case.
That expansion has renewed attention to how states structure their markets. Industry representatives are emphasizing competition, taxation, and consumer protections as part of the effort to draw wagering away from illegal sportsbooks.
New Jersey’s role in opening state markets
On May 14, 2018, the Supreme Court struck down the Professional and Amateur Sports Protection Act, known as PASPA. The court ruled that the federal prohibition on state authorization of sports betting violated the anti-commandeering rule.
Delaware became the first state outside Nevada to launch regulated betting after the decision. It went live on June 5, 2018. New Jersey followed on June 14 after Gov. Phil Murphy signed legislation.
The resulting state-by-state system has produced different approaches. Tennessee established an online sports betting market without commercial casinos. Besides, New Hampshire operates through its state lottery and a contracted sportsbook partner.
Revenue growth puts tax policy in focus
Focus Gaming News reported that US sports betting revenue reached $16.96 billion in 2025. That figure was up 22.8% year over year. Wagers totaled $166.94 billion that same year. State-regulated sportsbooks generated $3.71 billion in taxes, a 32.4% increase.
Tax structures vary substantially for states.
- New York taxes online sports betting revenue at 51%.
- Pennsylvania’s rate is 36%.
- Illinois uses a progressive framework that includes a per-wager fee component.
Sports Betting Alliance executive Joe Maloney told the outlet that states must balance public revenue with legal operators’ ability to compete against illegal betting businesses.
Illegal sportsbooks remain a competitive challenge
According to American Gaming Association analysis, Americans wagered an estimated $84 billion with illegal bookmakers and offshore sportsbooks. The estimated illegal share of the total sports betting market fell from 36% in 2022 to 24% in the comparison cited.
Maloney advocated reasonable taxes, efficient licensing, consumer protections and enforcement against illegal operators. He also linked competition to improvements in betting products and responsible gaming investment.
“Competition drives innovation for better products, improves the customer experience, and encourages greater investment in responsible gaming tools and protections,”
Maloney said.
Source: As reported by Focus Gaming News.
