Since the legalization of sports betting in the United States, following the Supreme Court’s 2018 decision striking down PASPA, the industry has grown from a single-state Nevada monopoly into a national market spanning 39 states, plus Washington D.C.
In 2025, regulated U.S. sportsbooks processed $165.58 billion in total handle, generated $16.80 billion in gross gaming revenue, and contributed $3.66 billion in state tax revenue nationwide.
APSM breaks down which states benefited most from that growth, how sports betting revenue is changing the financials between leagues, teams, and sportsbooks, and where the projections point from here.
How Sports Betting Has Affected Team Revenue
Legal sports betting has fundamentally changed how teams, leagues, and states approach revenue generation.
Sponsorship Deals
Teams are signing multi-million-dollar sponsorship deals with sportsbooks like DraftKings, FanDuel, and BetMGM, creating an entirely new revenue category that didn’t exist a decade ago.
Increased Fan Engagement
More fans engaging with games through bets tends to drive higher attendance, merchandise sales, and overall viewership, betting has become a genuine engagement mechanism, not just a side activity.
Revenue Sharing
Major leagues now maintain formal revenue-sharing and data-licensing arrangements with sportsbook operators, giving teams a direct financial stake in the betting ecosystem surrounding their own games.
Top 5 Sports Betting States by Handle in 2025
1. New York | $26.3 billion handle
New York isn’t just the top state, it’s dominant by a wide margin, processing nearly 16% of the entire national handle on its own. That dominance is structural: a mature, multi-operator mobile market, extreme population density, and 11 professional sports franchises spanning every major league keep bettors engaged essentially year-round.
The real number that matters is tax revenue, not handle. New York taxes sportsbook operators at a 51% rate, the highest in the country, (tied with NH & RI), which meant the state collected $1.3 billion in sports betting tax revenue in 2025, more than the next four states combined.
2. Illinois | $15.5 billion handle
Illinois has emerged as the clear number two market, anchored by Chicago’s concentrated professional sports presence. Unlike New York’s flat rate, Illinois uses a sliding tax scale from 20% to 40%, plus a new per-wager tax introduced in 2025, generating ~$480 million in state tax revenue, about 13% of the national total.
3. New Jersey | $12.2 billion handle
New Jersey was the state that set the entire post-PASPA precedent, the first true legal sports betting market outside Nevada, and it remains one of the most balanced and competitive retail-and-digital markets in the country. It no longer leads the nation in handle the way it once did, but it remains foundational to the industry’s structure.
4. Ohio | Top-5 market since its 2023 launch
Ohio has climbed into the top five since legalizing mobile sports betting in January 2023, a genuinely fast rise for a market that young. Ohio also raised its sportsbook tax rate from 10% to 20% within its first year of legalization, a sign of how quickly states adjust once they see real revenue potential.
5. Arizona / Pennsylvania | TIE
Arizona and Pennsylvania both maintain top-five presence by handle, with Pennsylvania operating under one of the highest tax rates in the country at 36% on online wagering, a structure closer to New York’s aggressive model than to lower-tax states like Ohio or no tax like Nevada.
Ten states combined, New York, Illinois, New Jersey, Ohio, Arizona, Pennsylvania, Massachusetts, Nevada, Virginia, and North Carolina, processed more than $113.87 billion in combined handle in 2025, roughly 69% of all wagers placed nationwide.
States Still Sitting on the Sidelines
Texas, Florida, Georgia, and California, four of the largest population states in the country, still prohibit standard legal sports betting as of 2025. California specifically remains a massive potential market that simply hasn’t legalized yet, a genuinely significant amount of revenue sitting unrealized purely due to state-level legislative decisions rather than any lack of demand.
Some states without full legalization still capture betting-adjacent revenue through other channels, tribal casino sportsbooks and horse racing wagering in states like Washington fill part of that gap without requiring full-scale legalization.
Why Handle Isn’t the Same as Revenue
This is the distinction most casual coverage skips entirely. Handle is the total dollar amount wagered. Gross Gaming Revenue is what’s actually left after paying out winning bettors, and nationally that ran at a 10.15% hold rate in 2025, meaning sportsbooks kept roughly 10 cents of every dollar wagered as their actual take.
That’s the number states tax, and it’s the number that actually determines how much real money moves through this industry, not the much larger, more headline-friendly handle figure.
Bottom Line
New York’s $1.3 billion in sports betting tax revenue, more than the next four states combined, is the single number that best captures how concentrated this industry actually is.
A handful of states with mature mobile markets and dense professional sports schedules are capturing the overwhelming majority of both the handle and the tax benefit, while states like California and Texas, despite massive population bases, are sitting on the sidelines entirely.
As more states weigh legalization and existing markets keep adjusting tax rates upward, understanding where the real money concentrates, not just which states technically allow betting, is what actually explains how this industry is reshaping team and state revenue simultaneously.
For more information on specific state-tax information check out the –> APSM State Athlete Tax Glossary
Top Sports Betting States (2025) FAQs
Which state generated the most betting revenue in 2025?
New York, by a wide margin, both in total handle ($26.3 billion) and tax revenue ($1.3 billion), driven by its 51% operator tax rate, the highest in the nation, combined with extreme population density and 11 professional sports franchises.
Is Nevada still a top sports betting state?
No longer by total handle. Nevada, the original single-state market before 2018’s nationwide legalization, has been surpassed by mobile-first states like New York, Illinois, and New Jersey, which generate significantly higher betting volume through app-based wagering.
Why do some large states like Texas and California still prohibit sports betting?
Legalization requires state-level legislative action, and both states have not yet passed laws permitting standard sports betting, despite representing some of the largest potential markets in the country by population.
What is the difference between betting handle and sportsbook revenue?
Handle is the total amount wagered. Gross Gaming Revenue is what sportsbooks actually keep after paying out winning bets, running at roughly a 10.15% hold rate nationally in 2025. States tax GGR, not the much larger handle figure.
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Disclaimer: This article contains general financial information for educational purposes and does not constitute professional advice. APSM estimates are derived from publicly available information, tax assumptions, finance modeling, and industry-standard fee structures. Actual earnings may vary based on residency elections, private contract provisions, image/media rights agreements, bonuses, and tax filings.
