Issue Brief by Policy Analyst, Katie Lee | klee@csg.org

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On May 14, 2018, the U.S. Supreme Court ruled 6-3 in Murphy, Governor of New Jersey v. National Collegiate Athletic Association (Murphy v. NCAA) to strike down the 1992 Professional and Amateur Sports Protection Act (PASPA), which had long banned single-game sports betting for both professional and amateur sports.¹ This landmark decision was closely watched by state governments across the nation, as lifting the ban could create a new source of revenue. The decision was preceded by a long battle from New Jersey, which went through the court system twice, with major sports leagues taking them to court for two pieces of legislation in 2012 and 2014. On September 5, 2017, West Virginia and 20 other states submitted an amici curiae brief supporting New Jersey. Several attorneys general from CSG South member states, including those from Florida, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee, and Texas, as well as Kentucky’s governor, were among the signatories.²

Currently, sports betting is a continuously growing industry that has shown itself to be a robust revenue source for states. The American Gaming Association has estimated Americans will wager $3.1 billion on the men’s and women’s college basketball tournaments in 2025, up from $2.7 billion in 2024.³

Relevant Definitions

Line	The terms of a wager.
Handle	The total dollar amount wagered. The handle can be subdivided into the cash handle, representing all bets made with cash, and promotional wagers, which are combined to make the total handle.
Gross Gaming Revenue (GGR)	The total dollar amount wagered minus the amount that is returned to players (RTP) for their winning bets. GGR = Handle — RTP
Hold or Hold Percentage or Gross Gaming Revenue Margin (GGRM)	The sportsbook’s winning percentage of the total amount gambled. Hold = GGR / Handle
Net Gaming Revenue (NGR)	The sportsbook’s gross gaming revenue, subtracting out promotional wagers, free bets, and player incentives. NGR = GGR — Promotional Wagers
Parimutuel	A type of betting where all bets of a particular type are grouped together in a pool, and then a specified percentage is deducted for taxes and the house take. The payoffs are then determined by the number of winning bets, and the remaining pool is shared among the winners. Also known as a “sports pool” or “pool sharing.”
Sportsbook	An establishment that accepts bets on the outcome of sporting events. Also referred to as a book. Typically, this is the casino, commercial sportsbook operator, or occasionally, a governmental entity like a state lottery.

Proposed 2025 Legislation

Georgia, Oklahoma, South Carolina, and Texas introduced legislation in 2025 to legalize sports betting in their respective states, though no states seem close to passing any legislation surrounding it.

Representative Marcus Wiedower introduced House Bill 686 and House Resolution 450 in Georgia. The bill aimed to legalize and provide a taxation framework for sports betting, and the resolution included a proposal for a constitutional amendment. In the Senate, Senator Billy Hickman sponsored Senate Bill 208 and Senate Resolution 131, which sought to expand the Georgia Lottery’s role in regulating sports betting. However, these bills and resolutions stalled in committee and failed to reach crossover day, preventing further progress in the 2025 legislative session.⁴

The Indigenous tribes in Oklahoma hold exclusive rights to gambling in the state. The Oklahoma legislature has proposed several bills (Senate Bill 164, House Bill 1047, and House Bill 1101) in 2025 to legalize sports betting or to begin negotiations for sports betting with local tribes.⁵ These bills are unlikely to be passed as Governor Stitt has claimed the bills would die on his desk, and he wants more input from the tribes.⁶ On March 25, 2025, Oklahoma’s leading gaming tribes released a position in support of legalizing sports betting with amended language of the proposed bills that the tribes would support.⁷

South Carolina lawmakers introduced bills aiming to legalize and regulate sports betting in the state. House Bill 3625 has significant support from 11 sponsors. However, these bills have stalled in committee, and a spokesperson for Governor McMaster has stated that “Governor McMaster has long opposed efforts to legalize casino and sports gambling in South Carolina.”⁸

Texas legislators have proposed a resolution and a bill in the Senate and House, respectively, to legalize sports betting but have received resistance from legislators and Governor Patrick.⁹ Senate Joint Resolution 16, filed by Senator Carol Alvarado, proposes legalizing both sports betting and casino gambling in Texas. This bill would establish the Texas Gaming Commission to oversee and regulate these activities if enacted.

Concerns and Work Arounds

A large concern revolving around the legalization of sports betting is the increase in addiction and bankruptcy from sports betting use. According to research led by Brett Hollenbeck from the UCLA Anderson School of Management, legalized sports betting alters consumer spending habits and affects their financial well-being. The findings in a working paper show that overall consumer financial health has seen a “modest decline” in states that have legalized sports betting. The research revealed that, within four years of legalizing online sports betting, average credit scores dropped by 1 percent, debt collection amounts rose by 8 percent, and bankruptcy filings increased by 28 percent, equating to approximately 30,000 additional bankruptcies annually.¹⁰

Some states, like Tennessee and Virginia, are addressing this by promising a portion of tax revenue from sports betting to aid addiction or gambling recovery programs. Tennessee requires that a portion of the revenue from the state’s sports betting industry be directed to the Problem Gambling Prevention Program. This program is designed to identify and assess those with gambling problems and if necessary, provide outpatient treatment services. Virginia has a similar initiative through the Virginia Problem Gambling Treatment and Support Fund, which also helps fund responsible gambling efforts and treatment programs.

Another rising issue is that individuals under 21 years old use certain platforms to place sporting bets. For example, a social sports betting platform called Fliff navigates sports betting regulations by marketing as a “free-to-play” social gaming service rather than a traditional betting or gambling platform. It allows users to place bets with “Fliff Coins,” a virtual currency earned through activities on the platform or through purchasing with real currency.¹¹ These coins have no real-world value and cannot be exchanged for cash or prizes directly, allowing Fliff to avoid the legal requirements tied to real money betting. In some regions, Fliff uses a sweepstakes model where users can earn virtual coins and occasionally be entered into sweepstakes for a chance to win real-world prizes. Since Fliff doesn’t use real currency and cannot be directly redeemed, those under 21 years old can place bets on the app even though they can spend real money on bets. This model is permissible in certain jurisdictions since it does not fall under traditional sports betting or gambling laws.

Current Framework

Even with concerns surrounding sports betting, expanding it in Southern states has resulted in an influx of tax revenue, providing states with new financial resources. Hold percentages lie close to 10 percent for Southern states for both 2024 and 2023, while the revenue generated through taxes has increased between the two years.¹² The expansion of sports betting into new states has been the biggest driver of the growth of legal wagers and tax revenues, though the impact of the increase differs from state to state. Below is a table showcasing the tax revenue generated from sports betting in Southern states in 2024 and 2023 and the framework of Southern states with passed legislation for sports gambling.

State	2024 Sports Betting State Tax Revenue (in millions of USD)	2023 Sports Betting State Tax Revenue (in millions of USD)
Arkansas	7.12	4.32
Florida	-*	-*
Kentucky	38.62	15.5
Louisiana	59.44	38.87
Mississippi	4.81	7.23
Missouri	-*	-*
North Carolina	96.8	-*
Tennessee	85.83	83.3
Virginia	92.26	71.05
West Virginia	5.6	5.26

Arkansas

Following the approval of a ballot referendum in November 2018, casinos in the state are authorized to offer all casino games, including sports betting. The constitutional amendment authorizes four casino licenses to be issued in the state: one each in Pope and Jefferson counties and one at each existing racetrack. Arkansas voters repealed the Pope County license award through a constitutional amendment known as Issue 2 in November 2024. Under Issue 2, county-wide elections are now required for future casino expansion. This amendment took effect on November 13, 2024.¹³

Authorized operators: The state’s existing gaming facilities are allowed to offer sports betting.
Age restriction: 21+
Taxes and fees: Sports betting is subject to a tax of 13 percent on the first $150 million of net casino gaming receipts and 20 percent on net receipts exceeding $150 million.¹⁴ The Southland and Oakland gaming facilities are not required to pay any additional licensing fees to offer sports betting. However, applicants for the additional two licenses must pay an application fee of up to $250,000.
Online/mobile: Licensed casinos may accept wagers within their facilities through betting stations or via a mobile account wagering system. In addition, mobile sports wagering may be operated directly or through an intermediary by a casino licensee currently operating a land-based sports pool.¹⁵

Florida

The 2021 Gaming Compact signed between Governor DeSantis and the Seminole Tribe of Florida provides the Seminole Tribe exclusive rights in running gambling activities with the stipulation that the tribe will give $2.5 billion of its revenue to the state for the first 5 years of the compact.¹⁶

Authorized operators: The Seminole Tribe of Florida
Age restriction: 21+
Taxes and fees: The Seminole Tribe must pay 13.75 percent of the Net Win received by the tribe from sports betting and 10 percent of Net Win received by the tribe from a brand marketed by a qualified-parimutuel permit holder. If the Seminole tribe fails to partner with at least three pari-mutuel wagering operators within three months of the gaming compact’s effective date, the tribe’s revenue share payments to Florida will increase by 2 percent.¹⁷
The tribe is required to pay an annual oversight assessment of up to $600,000 and if any other facilities are added the assessment increases by $150,000 annually per additional facility. They are also required to make an annual donation of $250,000 per operation gaming facility to the Florida Council on Compulsive Gaming.¹⁸
Online/mobile: Only the Seminole Tribe is allowed to have online sports betting.

Kentucky

Governor Andy Beshear signed House Bill 551 in March 2023 to authorize land-based and mobile sports betting in Kentucky. With no established casino gaming industry in Kentucky, the law approved by the state legislature authorized sports betting exclusively through Kentucky’s licensed horse racetracks, with track owners eligible to deploy up to three mobile sports betting platforms under their sports betting licenses.¹⁹

Authorized operators: Racetracks and simulcast facilities that also offer wagering on horse races
Age restriction: 21+
Taxes and fees: Revenue from land-based sports betting in Kentucky is taxed 9.25 percent, while revenue from mobile sports betting is taxed 14.25 percent.²⁰ Sportsbook operations are further subject to a 0.25 percent federal excise tax applied to the wagering handle.²¹
Online/mobile: Available with online sportsbook platforms affiliated with licensed racetrack operators.

Louisiana

Senate Bill 247, enacted in June 2021, establishes a framework for sports betting.

Authorized operators: The Louisiana Gaming Control Board (LGCB) is allowed to issue up to 20 licenses to operate a sportsbook. The LGCB must first consider applications from the state’s land-based casino, the state’s 15 riverboat casinos, and the state’s four racetracks.
Age restriction: 21+
Taxes and fees: Operators must pay a $250,000 application fee and a $500,000 license fee for a sports betting operator license, which must be renewed every five years.²² Online sportsbook platform providers will be subject to a $100,000 application fee and a $250,000 permit fee, which must also be renewed every five years.²³ Sports-betting revenue will be taxed at a rate of 10 percent for sports wagering conducted at a retail location. For revenue generated through mobile applications or websites, there is a 15 percent tax on sports-betting revenue.²⁴
Online/mobile: Mobile/online sports betting is permitted. The Louisiana Lottery Corporation may operate and administer a sportsbook, which must be offered exclusively electronically.

Mississippi

Mississippi legalized sports betting in 2017 with House Bill 967, which came into effect in 2018 after the New Jersey v. NCAA Supreme Court decision. Legislation introduced in 2025 to legalize online sports betting as currently betting is only allowed on property of licensed areas. House Bill 1302 proposes a 12 percent tax on online sports wagers, with revenue allocated to support small retail casinos and directed to the Emergency Road and Bridge Repair Fund across all 82 counties. It also allows each brick-and-mortar casino to partner with up to two online sports betting platforms and two race book platforms.²⁵ House Bill 1302 died in committee in March 2025.

Authorized operators: Any current holder of a Mississippi gaming license can apply to offer sports betting.
Age restriction: 21+
Taxes and fees: Sports betting revenue is taxed at that same rate as other casino gaming revenue — 11-12 percent, with 8 percent going to the state and 3-4 percent in local taxes.²⁶
Online/mobile: Mobile sports betting is permitted, but only if conducted on-site. No mobile or online betting can take place off the grounds of a casino in Mississippi.²⁷

Missouri

Sports betting is not yet active in the state. However, in November 2024, a ballot initiative was passed which allows the six in-state sports teams and casinos to apply for licenses to operate land-based and mobile sports betting.

Authorized operators: The ballot initiative offers six in-state sports teams and casinos the opportunity to apply for licenses to operate land-based and mobile sports betting.
Age restriction: 21+
Taxes and fees: The ballot initiative imposes a 10 percent wagering tax on adjusted gross revenue received from sports betting conducted by each licensee and each sports betting operator acting on behalf of a licensee.²⁸ The State of Missouri is charging five-year license fees of up to $250,000 for actual on-site retail sportsbooks and up to $500,000 for mobile app gaming, with a tax of 10 percent on providers’ profits, after significant write-offs for promotional campaigns to lure customers.²⁹

North Carolina

North Carolina passed House Bill 347 in 2023 which established a framework for both online and retail sports betting, and online sportsbooks launched in March 2024.

Authorized operators: The Eastern Band of Cherokee Indians and the Catawba Indian Nation are authorized to offer sports betting⁹ as a form of Class III wagering. North Carolina professional sports teams, NASCAR, the PGA, and owners of in-state motorsports and golf facilities can apply for operator licenses for sports betting.
Age restriction: 21+
Taxes and fees: Interactive sports betting operators must pay an 18 percent tax on gross wagering revenue. The license fee for an operator license is $1 million and is valid for 5 years. The license fee for a service provider is $50,000 and is valid for 5 years.³⁰
Online/mobile: Mobile sports betting operators must enter into a written designation agreement with a licensed operator and obtain a service provider license to offer mobile sports betting. The licensing fee for a sports betting supplier license is $30,000 and valid for 5 years.³¹

Tennessee

Tennessee legalized sports betting in 2019 with House Bill 001 and was the first state to pass sports betting without casino gaming. The bill created the Sports Wagering Advisory Council (SWAC) that regulates betting licenses and taxes.

Authorized operators: Operators must obtain a sports betting license from SWAC to offer sports betting services in the state. Since Tennessee only offers online sports betting, only online operators/sportsbooks can apply for a license.³²
Age restriction: 21+
Taxes and fees: There is a 20 percent privilege tax on the adjusted gross income of a licensee to be paid monthly with 80 percent of the tax to be distributed by the corporation to the state treasurer for deposit into the lottery for education account.³³ There is an application fee of $50,000 and an annual licensing fee of $750,000.
Online/mobile: Available anywhere within the state and no requirement for in-person registration.

Virginia

Virginia passed House Bill 896 in 2020 which legalized sports betting and provided a framework for retail and online sports betting.

Authorized operators: The legislation authorizes up to 12 online sports-betting providers to operate in the state. All licensed casinos in the state are allowed to apply for retail sports betting licenses.³⁴
Age restriction: 21+
Taxes and fees: Operators are required to pay an application fee amounting to $50,000 for each of the “principals” named as part of their application.³⁵ If issued a permit, operators will then be required to pay an additional fee of $250,000, and a $200,000 renewal fee every three years. The tax on sports betting is 15 percent of adjusted gross gaming revenue.³⁶
Online/mobile: A permit holder may operate its sports betting platform under a brand other than its own but is prohibited from holding itself out to the public as a sports-betting operation under more than one brand and must conspicuously display its utilized brand to sports bettors.³⁷

West Virgina

West Virginia passed Senate Bill 415 in 2018, which legalized sports betting in the state.
Authorized operators: The state allows existing casino and racetrack licenses to apply for licenses to operate sports betting.

Age restriction: 21+
Taxes and fees: West Virginia levies a 10 percent tax on operators’ gross sports betting revenue.³⁸ A $100,000 application fee is required with the license application. The license is valid for a five-year period and may be renewed for additional five-year periods upon payment of a $100,000 renewal fee, provided the operator continues to meet all qualification requirements.³⁹
Online/mobile: Each licensee can offer up to three individually branded mobile skins, meaning that online platforms can offer services in West Virginia if they are partnered with an existing casino or racetrack. Each skin partner must display the logo of the license-bearing casino within its platform.⁴⁰

Conclusion

Sports betting has resulted in tax revenue for states, but it has also raised concerns about addiction, financial health, and the potential for underage gambling. As states like Georgia, Oklahoma, South Carolina, and Texas continue to navigate the complexities of sports betting legislation, the broader legalization trend shows no signs of slowing down. While challenges persist, such as political opposition, regulatory hurdles, and concerns regarding public health, the industry’s growth offers a promising financial opportunity for states seeking to diversify their revenue streams. Allocating a portion of revenue funds to support gambling addiction and mental health programs appears to be an emerging solution to assist individuals affected by sports betting and address the growing prevalence of sports betting in the population. With the increasing prevalence of online betting, states are approached with the unique issue of social betting applications allowing youths to begin betting earlier due to the use of in-game currency.

End Notes

1. Murphy, Governor of New Jersey, et al. v. National Collegiate Athletic Assn. et al., Opinion, 584 U.S. (2018).
2. Brief for West Virginia, et al. as Amici Curiae Supporting Petitioners, Christie v. National Collegiate Athletic Assn, U.S., No. 16-476 (2017).
3. Americans to Legally Wager Estimated $3.1 Billion on March Madness, American Gaming Association, March 15, 2025.
4. Jeff Amy, “Efforts by Georgia lawmakers to legalize sports betting fizzle again”, AP News, March 2025.
5. Jordan Gerard, ”Could the OKC Thunder get involved in sports betting in Oklahoma? One lawmaker hopes so”, The Oklahoman, February 2025.
6. Dakota Wahpekeche, ”Oklahoma sports betting not likely to become law this year”, Koco News.
7. Ryan Butler, ”Oklahoma Sports Betting Efforts Take Shape as Gaming Tribes Offer Position”, Covers, March 25, 2025.
8. Josie Frost, “South Carolina sports betting bill faces uphill battle amid governor’s opposition”, News19.
9. Will Texas Legislature Legalize Sports Betting?, The Daily Texan, March 2025.
10. Hollenbeck, “The Financial Consequences of Legalized Sports Gambling”, UCLA Anderson School of Management, 2024.
11. Mike Mckean, ”Fliff Cash: What Is It and How Does it Work?”, Deadspin, March 2025.
12. Adam Hoffer, “Bets on Legal Sports Markets Pay Off Big for States, Sportsbooks, and Consumers, Tax Foundation, December 2024.
13. “Constitutional Amendment Proposed by Petition of the People (Casinos)”, Arkansas Advocate, 2024.
14. “Issue No. 4”, Arkansas Secretary of State, 2018.
15. “Constitutional Amendment Proposed by Petition of the People (Casinos)”, Arkansas Advocate, 2024.
16. “Summary of 2021 Gaming Compact.” Florida Senate, 2021.
17. Ibid.
18. Ibid.
19. ”House Bill 551”, Kentucky General Assembly, 2023.
20. Ibid.
21. Ibid.
22. “SB247”, Legiscan, June 21, 2021.
23. Senate Bill 247, Legiscan, 2021.
24. Ibid.
25. HB 1302, Mississippi House, Legiscan, 2025.
26. House Bill 967, Legiscan, 2017.
27. Ibid.
28. ”Proposed Amendments to the Constitution of Missouri and Statutory Propositions”, 2024 General Election Ballot Measures, 2024.
29. Ibid.
30. House Bill 347, North Carolina General Assembly, 2023.
31. Ibid.
32. Ibid.
33. ”Bill Text: TN HB 0001”, Legiscan, June 2019.
34. Code of Virginia, § 58.1-4032, 2024.
35. Ibid.
36. Ibid.
37. Code of Virginia, § 58.1-4034, 2024.
38. Senate Bill 415, West Virginia Legislature, 2018.
39. Ibid.
40. Ibid.