5 Threats To The US Sports Betting Industry

The US sports betting boom ran out of steam in 2024. More worrisome, lawmakers, regulators, the media and the public are beginning to question the rapid spread.

The US sports betting industry is at a crossroads. The spread was rapid—from Nevada to 38 states (30 with mobile betting) in five years, and any hope that legalization would be handled with caution and care has fallen by the wayside.

As many predicted, the social harms, scandals, regrets, and inevitable calls to rein in the industry are kicking in.

In this column, I will combine several disparate threats the industry faces. Any one of these could fundamentally change the course of US sports betting, and the industry is staring down the barrel of five guns.

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Will states continue to alter the deal?

Not long ago, reopening a gambling law was considered verboten. In the past few years, that unwritten rule has been abandoned.

• Ohio doubled its sports betting tax rate last year, and Illinois and New Jersey are considering similar increases.

• Colorado and Virginia rewrote their promotional deductions policies, phasing them out or down over time.

• And somewhat related, licensed daily fantasy sports operators have seen previously approved games relabeled as illegal games overnight.

Whether or not you agree with these decisions, the now-looming threat of abrupt changes puts operators in a tricky situation. These companies are investing millions, sometimes tens of millions of dollars, to operate in a state under the assumption that the conditions will remain the same, or at least close to the same (some regulatory changes are expected), for a significant period. That confidence is eroding.  

Pulling the rug out from under the operators is a surefire path to losing businesses and creating adversarial relationships.

Can the industry regain control of the narrative?

The gambling industry is full of surprises, but one thing you can count on is a gambling court case update every Friday and an article about the rise in problem gambling landing on the weekend—and just for good measure, there are the increasingly common scandal stories.

To say the industry has lost the plot is an understatement. But I’m not surprised. Unless it’s trying to expand gambling in a new market, the industry is rarely proactive. With most things, it’s reactionary and tends only to interact when absolutely necessary – when the train has already gone off the rails.

When there is negative press, the industry buries its head in the sand or pushes back with cries of being mischaracterized, falsely accused, or conflated with offshore bookies. And any communication is always delivered in corporate PR speak.

But as I’ve previously said, arguing back and forth is a road to nowhere.

Both sides have their own data and reports to point to, and I’ve yet to come across someone who has gone from anti-gambling to pro-legalization.

The industry needs to pick its battles and go on the offensive, admit (gasp!) that gambling does cause social harm, and regain control of the narrative because, at the moment, it’s primarily seen as a self-serving entity with one thing on its mind: money.

Are player prop bans the end, or just the beginning?