Gamblers placed wagers totaling a record $132 million on Super Bowl LI Sunday at Nevada sports books. However that amount represents a drop in bucket compared to the $4.5 billion of bets placed illegally on the game.
Nevada is currently the only state where gambling on sports is legal, but the black sports betting market is estimated to account for 97% of all wagers placed, according to the American Gaming Association.
These bettors rely on offshore sports books, online means and illegal bookies to satisfy their tax-free gambling needs thanks to the Professional and Amateur Sports Protection Act signed in 1992 that made Nevada the only state to legally place bets on sports.
"Vegas currently has a monopoly on sports betting," Erik Balsbaugh of the American Gaming Association told TheStreet. "The internet has changed a lot of things in the industry though, and it's time for the U.S. to catch up."
The sportsbook from companies like MGM Resorts (MGM) and Las Vegas Sands (LVS) on the Las Vegas Strip comprises between 1.5% and 2% of total gaming revenue annually, according to Union Gaming analyst John DeCree.
Betting on the Super Bowl, both legal and illegal, was up year over year in spite of the fact that viewership for the big game was down from a year ago.
Legal sports gambling is good for the game, Balsbaugh argued, because people with something riding on the game tend to be more attentive to the games and are more likely to even watch the commercials during a broadcast.
The American Gaming Association's research suggests that NFL bettors average watching 19 more games per season than non-bettors do.
"Bettors are super valuable to advertisers, and they engage with the game on a level that casual viewers simply do not," Balsbaugh said.
In the past, the NFL has been very hostile to gambling, contending that sports betting sullied the league's good name.
In 1976 then commissioner Paul Tagliabue sued the state of Delaware to challenge the state's plan to open sports books for professional football, claiming that the move infringed on the league's trademarks.
But the league has softened its stance somewhat in recent years as interest in daily fantasy football has exploded.
Making sports betting legal across the U.S. could be a boon for the industry as well as add protections for gamblers currently operating outside of the law.
"Legalizing sportsbook in more states or nationwide would help regulate the illegal sports gambling market in the U.S., and potentially create opportunities for governments and regional casino operators," DeCree said.