By now, you have probably heard about the sports betting boom reaching the United States. It doesn’t matter whether you are plugged into the industry—or sports in general. Marketing, branding and reporting for sports betting in the United States is everywhere.
This ubiquity has incited an uproar, from both pro-gamblers and anti-gamblers. The industry, in turn, is being painted as reaching its fever pitch. Billions upon billions of dollars are being wagered, lost and made. Lawsuits are being filed. The demand for in-depth sportsbook reviews is at an all-time high. Betting operators are paying gobs of money for sponsorships, not to mention sports gambling licenses. Studies are being commissioned on the impact gambling has on problem betting, socioeconomic struggles and mental health.
It is easy to weigh all of this and think that the industry is peaking. You might even believe sports betting in the USA is a bubble that’s about to burst. The truth is, though, the U.S. legal sports betting boom isn’t even underway. Not yet.
Not until Texas and California join the fracas.
California and Texas Sports Betting Projections are Something Else
Though it’s impossible to put exact figures on how much California sports betting and how much Texas sports betting will ultimately be worth, plenty of statisticians have used data analysis to offer ballpark predictions. Most of them end up in the same relative area.
Let’s start with The Lone Star State. According to a forecast made by Eilers & Krejcik in November 2024, legal Texas sports betting would yield a gross gaming revenue (GGR) of $3.68 billion by the third year of operations.
Believe it or not, these projections actually pale in comparison to legal California sports betting predictions. Estimates for GGR by Year 3 are as high as $4 billion. And even that may land on the conservative.
A couple of outlets have numbers closer to $5 billion or more. But these predictions are fewer and further between. When you consider the difference in population between California and Texas, rolling with the $4 billion projection makes more sense.
Or does it?
Sports Betting in California and Texas May be Worth More Than We Think
The best way to provide estimates for Texas and California sports betting is by using per-capita projections. This essentially amounts to how much GGR can be generated per each member of the state’s population.
Coming up with a reasonable per-capita prediction entails finding a quality. Right now the New York sports betting market is the best benchmark. The Empire State is currently the most lucrative sports betting market in the United States. For the year 2024, it generated $2.05 billion in GGR against a population size that, according to the DataCommons.org, clocked in at around 19.9 million people. The per-capita number can be calculated by dividing the total GGR ($2.05 billion) by the population (19.9 million). This comes out to a per capita of $103.17
This is the per-capita baseline we can use for California and Texas. First, though, we should adjust for the median incomes in each state.
According to World Population Review, the median household income for New York comes in at $42,397. For California, this number hits $50,251. That is about 18.5 percent higher than The Empire State. If we make this adjustment, The Golden State’s estimated GGR per population member comes to $122.26 (i.e. $103.17 multiplied by 1.185). If we take that per-capita estimate, then multiply it by California’s total population of over 39.2 million people, we get a projected GGR of…more than $4.8 billion.
We can now use this same process for Texas. The median household income in The Lone Star State is $41,661. In this instance, that is just 98.3 percent of New York’s $42,397. From here, we just multiply NY’s per-capita GGR of $103.17 by 0.983 to get Texas’ estimate. This comes out to around $101.42.
Once again, we can take this figure and multiply it by The Lone Star State’s total population of close to 31.3 million. This gives us a total GGR projection of $3.2 billion—higher than the $3 billion forecast from Eilers & Krejcik.
The U.S. Sports Betting Boom Won’t Begin Until Texas and California Join the Fold
The biggest takeaway from all of this? The two most lucrative sports betting markets in the United States don’t actually offer legal sports betting. Yet.
This will eventually change. Legal sports betting in Texas and California are matters of “when” rather than “if.” Granted, the exact timelines remain unclear. Based on the latest developments between sportsbooks and California tribal nations, we expect The Golden State to have legalized gambling by the end of the decade. Texas is an entirely separate matter. The wait could be longer. At the very least, Texas sports betting feels out of reach while Lieutenant Governor Dan Patrick still carries so much influence.
Regardless, the absence of these two markets from the current climate is an important asterisk. Sports betting may feel ubiquitous now. In truth, though, it has the potential to become even more prevalent—and by extension, more lucrative.
At the bare minimum, it is wildly premature to say the sports betting industry in the United States has already peaked. Even if more stringent regulation and offerings are soon introduced across the board, the business of sports betting has not come close to sniffing its true potential. That can only happen if and when the two most important markets of the sector are actually part of both current and future projections.