This year’s March Madness is primed to be another betting spectacle across the United States.
Last week, basketball fans were treated with nonstop hoops for four straight days. More if you count the First Four games. Over the next three weeks, the games whittle down and the stakes skyrocket until an NCAA Champion is crowned.
And the stakes will be especially high for sports bettors. A recent study by Eilers & Krejcik Gaming projected that sports bettors will wager substantially more on the Men’s NCAA Basketball Tournament than the 2024 Super Bowl.
Fans wagered roughly $1.5 billion on Super Bowl LVII between the Kansas City Chiefs and San Francisco 49ers. But EKG projects this year’s March Madness games to take in closer to $2.68 billion in wagers.
Only one problem: Georgia sports betting isn’t legal.
Sports bettors in Georgia can’t legally wager NCAA Tournament games. It’s obviously a blow to potential customers and the state government. Unlike other states, Georgia won’t reap the tax benefits of a legal betting market.
March Madness poised to be a tax dollar machine for sports betting
EKG projects the NCAA Tournament will be the most-bet event of the year, and it makes sense. There are so many games within a short time frame, giving bettors seemingly unlimited options.
For example, North Carolina just expanded its sports betting market to include online wagering right before March Madness started. That wasn’t a coincidence.
EKG’s study projects North Carolina’s newfound market to rank fourth nationally in NCAA Tournament betting handle. Roughly 8% of the country’s betting total for this event will come from the Tar Heel State. The study thinks North Carolina residents will wager closer to $221 million.
There are a lot of factors that go into that projection of $221 million. There’s always a massive jump right when a state’s sports betting industry launches, as there are thousands of hungry customers looking to try out different sportsbooks to find their favorites. Eventually, markets settle over time.
Additionally, North Carolina is a basketball hub. You’d be hard-pressed to find a state with more basketball history, with Duke and North Carolina dominating college basketball for decades. Both programs are in the NCAA Tournament this year, with UNC boasting a 1-seed.
Projecting how much tax revenue Georgia left on the table
On the surface, North Carolina is a good comparison for how much revenue Georgia could generate. Both states are in the southeastern region of the U.S. and have similar populations. North Carolina has 10.55 million residents compared to Georgia’s 10.8 million.
However, North Carolina is not a perfect example of the numbers Georgia could see for March Madness.
This year, Georgia did not produce an NCAA Tournament team in the men’s bracket. Even though March Madness is a holiday for basketball savants, having a local team in the tournament increases excitement. In turn, that leads to more betting.
Furthermore, Georgia simply does not have the same basketball history as North Carolina. As a result, don’t expect Georgia to come out of the gates and come up with a handle of more than $200 million in its first March Madness.
Ohio and Michigan might be the better comparison
It’s worth looking at where the EKG study projects similar states in population and region. Ohio’s population sits just under 11.8 million (about a million more than Georgia). Michigan is another state with a close population (10.1 million). EKG projects Ohio bettors will wager close to $110 million on sports betting. Michigan residents are expected to wager almost $70 million on the games.
Based on those three states, Georgia sports bettors could wager between $70-200 million on the NCAA Tournament.
Let’s be conservative. Only four states (North Carolina, Illinois, New Jersey, New York) are projected at or above $200 million. That’s even more than Nevada, which has the added benefit of Las Vegas casinos. Let’s assume Georgia sportsbooks handle between $100-120 million strictly from March Madness.
Under proposed legislation, that would be up to $2.16 million in tax revenue
Each state has different laws for collecting sports betting taxes. SB 386, which aims to legalize sports betting, calls for a 20% tax rate on sports wagering revenue. And sportsbooks typically hold anywhere from 6-9% during March Madness. There’s some unpredictability with upsets, which always throws a wrench in hold predictions. But let’s say Georgia sportsbooks could look at a wide range of somewhere between $6 million and $10.8 million in potential NCAA Tournament revenue.
Taxing those revenue figures at 20% equates to Georgia taking home anywhere between $1.2 million and $2.16 million in taxes from NCAA Tournament betting alone.
There isn’t a perfect science to it, as we’ll get a true grasp of Georgia’s sports betting numbers during the NCAA Tournament whenever the state legalizes the industry. But for now, it’s safe to say Georgia will miss more than $1 million in potential sports betting taxes on just March Madness.
