In the 27 states where it's legal, putting bets from a phone or other gadget has actually unlocked to much larger audiences.

Placing a bet on a video game or match is as easy as opening an app on your phone.

From office pools to gambling establishments to online betting apps, March Madness lures sports lovers and casual viewers alike to predict a winner of the annual NCAA college basketball competition.

Sports wagering in gambling establishments or racetracks is now legal in 38 states and Washington, D.C. Which number keeps growing. As of this month, six more states-Alabama, Georgia, Hawaii, Minnesota (tribe handled), Missouri and Oklahoma-had procedures pending to authorize sports wagering.

Related: March Madness Brings On the Bets

Some states have actually made wagering even easier: 27 states with legal sports betting have also authorized online sports wagering (with legislation presently pending in Mississippi). Online sports betting unlocks to much larger audiences since users can wager from a computer system or mobile phone throughout the state.

While sports betting expanded quickly after the U.S. Supreme Court eliminated the federal prohibition in 2018, it's not quite the wild west, as states have developed some regulations.

For instance, some states limit which sporting occasions are subject to bets. All states forbid betting on high school sports, however college sports wagering is regulated in a different way in every state. Some states restrict wagering on all college sports and athletic occasions, while others just prohibit banking on in-state groups. Other states have no restrictions on college sports betting.

Here are information on how states control:

- Blanket restriction on all college sports and athletic events: Oregon and Tennessee.
- Prohibition on in-state groups and in-state college occasions: D.C., New Hampshire, New Jersey, New York, Rhode Island ** and Vermont.
- Prohibition on in-state groups: Connecticut, Delaware, Illinois, Iowa, Maine, Massachusetts *, South Dakota **, Washington and Wisconsin.
- No constraints: Arizona, Arkansas, Colorado **, Indiana, Kansas, Kentucky, Louisiana, Maryland, Michigan, Mississippi **, Montana, Nebraska, Nevada, New Mexico, North Carolina, Ohio, Pennsylvania, West Virginia and Wyoming.

* Massachusetts enables wagering on in-state teams when those groups are participating in a competition.

** Rhode Island, South Dakota, Colorado and Mississippi likewise restrict proposition bets on college sports and athletic events. So-called prop bets are side wagers that have absolutely nothing to do with the outcome of an event, such as betting on the first string to rating, or perhaps the length of the pregame national anthem.

Lottery-Run Sports Betting

Lottery commissions in several jurisdictions-Washington, D.C., Montana, New Hampshire, North Dakota, Oregon, Tennessee, Virginia and Wyoming-partner with personal operators to provide sports betting. In the district, the lottery commission uses its own sports betting item in addition to partnering with private operators.

Does Sports Betting Settle?

States create income from sports wagering by taxing payouts. Tax rates on sports betting range from 6.75% in Iowa to 51% in New York and Rhode Island. A few states levy different rates on retail and online wagering. Retail video gaming operators revealed issue that online gaming would siphon off casino and racetrack customers and harm their bottom lines. In action, policymakers in some states created a two-tier tax structure to give retail sports wagering a lower tax rate. While the majority of states have a flat rate for sports wagering profits, Arkansas and Mississippi use finished tax rates, and Vermont enforces different rates on the 3 different sports wagering operators. (For current state tax rates, see March Madness Brings On the Bets.)

Since the legalization of sports betting, states have actually gathered hundreds of millions of dollars in tax income. Most of that has actually originated from online sports wagering because people who don't frequent casinos can get in on the action through a mobile app or site. And more betting methods more incomes.

Take Arkansas and New York, for circumstances. Both states expanded sports wagering to include online wagering in 2022. The next year, taxation doubled in Arkansas, with profits going from less than $2 million in 2022 to over $4 million in fiscal 2023. Similarly, New york city collected less than $2 million in tax earnings during the very first 9 months of fiscal 2021; after online sports wagering began in the last 3 months of financial 2021, revenue collections leapt to $163 million. The large increase in collections is due in part to the 51% tax rate on online sports betting.

The experience in other states is comparable. In fiscal 2023, online sports betting made up 92% of gross wagering receipts in Indiana and 89% of gross invoices in Pennsylvania.

However, tax revenue created from sports wagering is just a fraction of the video gaming pie compared to overall gambling establishment earnings. According to the American Gaming Association, commercial gaming operators contributed over $14.4 billion in video gaming taxes in 2023, compared to $2.1 billion from the sports betting industry.

Where Does the Money Go?

Sports betting supplies a constant income source for states, however it's not without costs.

Gambling dependency is a problem exacerbated by simpler access to sports wagering. In reaction, legislators in 14 states and D.C. allocate a part of sports wagering revenue for problem betting treatment. Other typical receivers of wagering revenue consist of education programs, regional governments and labor force development programs. Many states deposit the profits into their general funds and designate the funds where they please.