Tuesday, June 18, 2024

Legal Marijuana Probably Not As Profitable As Sports Betting

States where sports gaming is legal are already generating millions of dollars in tax revenue. And they are doing it without much risk.  

The cannabis industry is making impressive strides across the United States, swelling into a collective multi-billion dollar beast. But the legalization of marijuana might not be the most outstanding rockstar in the realm of economic saviors in America. Sports betting, however, could be.

In Illinois, for example, the state recently raked in a whopping $20 million during the first couple of weeks of legal cannabis sales. It was the kind of financial boost the state needed to begin tackling an enormous budget deficit, and it is one that will undoubtedly inspire more states to follow suit.  

Still, the real money, the funds that some officials are most excited about, could come from fans trying to win a few bucks by betting on their favorite sports teams. States where sports gaming is legal are already generating millions of dollars in tax revenue. And they are doing it without much risk.  

Gambling and marijuana have a lot in common. For years, both were considered products of degeneracy, the recreational path to deep downtrodden in the United States. They were almost exclusively for druggies, the debauched and the immoral swine coursing through the veins of this nation, all of them hellbent on leaving it in an empty state of godless decay. But that is no longer the case. 

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Marijuana is making some headway among mainstream society. It is now legal in 11 states like alcohol, and it is being used frequently by people of all races and social classes. Sports betting has experienced a similar coming out in the past year or so. Now, 14 states have forged a path allowing the existence of this gaming sect, with the odds in favor of more joining the fun very soon.

How To Get Your Money Back After A Bad Purchase
Photo by Sharon McCutcheon via Unsplash

All of this progress is due to a 2018 U.S. Supreme Court verdict that found the federal government’s Amateur Sports Protection Act (PASPA) to be unconstitutional. Until then, the law mandated that states could not “sponsor, operate, advertise, promote, license, or authorize by law or compact” sports betting. Now the market for such activity is starting to open up. 

Many believed the ruling not only carried enormous implications for sports betting, but also marijuana. After all, since the nation’s highest court basically determined that the federal government could no longer ban states from passing their own laws, it was conceivable that more jurisdictions would muster the guts to get involved with legal weed without the fear of backlash.

But we really haven’t seen a lot of movement with marijuana that can be attributed to the ruling. Most states are still leery of a cannabis industry, perhaps continuing to hold on to antiquated ideas that legal weed will lead to some strange uprising of apocalyptic mayhem. This, of course, cannot be said about the arena of sports betting. State lawmakers are beginning to recognize that it is a much larger cash cow than marijuana, and it’s one that doesn’t come with immediate social harms such as increased minor consumption and stoned driving. And it is extremely profitable.

Photo by nattanan23 via Pixabay

In fact, in the first four months of legal sports betting in Indiana, the state saw nearly $440 million in wagers, according to the Indiana Gaming Commission. And all of this cash was generated, too, without making much change to the current infrastructure. There also weren’t any long lines to contend with, like we’ve seen in states with legal weed, and no product shortages either. 

“Indiana went from nothing to…this is effectively found money,” Max Bichsel, group vice president of U.S. business for Gambling.com, told the Indianapolis Star. “The state is making money. The operators are making money. Everyone is making money.”

By all accounts, sports gaming seems to be a safer bet than marijuana. Indiana isn’t even considering allowing dispensaries to open anytime soon. It is content with its almost $4 million tax haul from gambling.

RELATED: How Legal Weed Will Be Problematic For Police In Pot-Free Indiana

Still, Illinois may initially fare better with legal marijuana than it does with sports betting when it officially launches this gambling sector later this year. The law will, at first, require people to place their bets at casinos or other larger sports venues.

So the take might not be as impressive as it was at the beginning in Indiana. After all, the bulk of the bets made in the Hoosier state from September through December last year (nearly 64%) were through online apps like DraftKings and FanDuel Sportsbook. But once Illinois residents are given the freedom to make wagers from the comforts of home, we could easily see sports betting giving legal weed a run for its money.


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