New Texas Sports Betting Estimates Shows Massive Earning Potential in The Lone Star State

Will Texas sports betting be legalized during the next round of legislative meetings set to take place early next year? We can’t be sure. But can be absolutely certain a lot of money is at stake.

There is an element of obviousness to this sentiment. The Lone Star State is the second-most populated location in the country. Their total number of residents currently exceeds 30 million people. That trails only California, which has a population north of 38 million residents. 

Couple this market size with the number of pro franchises in the region, and there is no way sports betting in Texas would be anything other than a major financial boon for state revenue. 

Even knowing that, though, the potential returns can be staggering when put into perspective. And, well, a new forecast for Texas sports betting is officially live. True to form, the projections might surprise…everyone.

Estimates Have Texas Sports Betting Handle Exceeding $30 Billion Annually

Previous estimates have the prospective Texas sports betting handle comfortably exceeding billions of dollars on an annual basis. None of them, however, have projected as much as the latest forecast. Here is Pat Evans of Legal Sports Report with the full lowdown:

“A new Texas sports betting forecast continues to show the potential of the massive market, potentially the largest online sports betting jurisdiction. Eilers & Krejcik updated its Texas sports betting forecast in October. It projected a mature handle of $32.1 billion, a 43 percent increase in its five-year revenue projection compared to a 2023 report. The Texas Sports Betting Alliance commissioned both reports. [For those who may not be familiar with them, the Texas Sports Betting Alliance is a group that’s composed of all professional sports franchises, pro sports leagues, racetracks, motorsports, and betti operators who support the legalization of sports gambling in The Lone State.] ”

These figures from Eilers and Krejcik are massive. And they outstrip the current top-of-the-line market. In the current landscape, without sports betting in Texas or sports betting in California, the returns from sports betting in New York take the poll position. At the current rate of wagering in The Empire State, they will finish the year with $21.1 billion sports betting handle. That is more than one-third lower than Texas sports betting projections.

Revenue from Sports Betting in The Lone Star State Projected to Easily Exceed A Quarter of a Billion Dollars

Of course, these figures only tell part of the Texas sports betting story. After all, an estimated handle is not profit. It is simply the total amount of money bet on sports during a given period. Online sportsbooks in Texas would have to pay out winning wagers, and Texas would tax a percentage of the remaining funds. 

The resulting number is significantly less. But it is also still very high. From Evans:

Along with the $32 billion in handle, the report estimates that mature Texas sportsbooks could generate $3.68 billion in gross gaming revenue. Because of the state’s potential, Eilers & Krejcik believes sportsbooks would invest heavily, and an initial ramp-up would finish in the third year. The report used a 15 percent tax rate in its projections. With promo deductions and federal taxes, Eilers & Krejcik projects the state could bring in more than $360 million annually once the market matures…Eilers & Krejcik based its economic projections on 2023’s House Bill 1942, which passed the House before dying in the Senate. That legislation would have allowed for online sports betting in Texas with up to 15 sports betting brands. The report also did not include any restrictions, such as a ban on college sports betting.”

While policymakers have maintained the state’s revenue does not need a sports betting infusion, it’s tough to pass on an extra $360 million per year. And by the way, this presumes the actual amount is not higher. It just might be.

Sure, the Eilers and Krejcik projections took some liberties. Texas sports betting regulators could absolutely decide to ban college sports betting. But even then, a 15 percent tax rate feels low—really low.

Texas Sports Betting May Be More Lucrative Than Optimistic Forecasts

The rise in popularity of online sports betting in the United States affords certain markets a bunch of leverage. And this list of regions includes Texas.

Consider New York sports betting. As one of the country’s flagship markets, online sportsbooks in the USA were pining to operate in The Empire State. So much so, in fact, that when New York legalized sports betting, operators agreed to a 51 percent tax rate. 

The market for Texas sports betting, meanwhile, profiles as larger. The Lone Star State has roughly 11 million more residents than The Empire State. To be sure, this does not mean that Texas can demand online sportsbooks in the U.S. pay them whatever. But they have more than enough cachet to mandate a tax above 15 percent. To be honest, they should have the ability to match New York’s clip.

Granted, things can change in a matter of years. Top online sportsbooks in the United States may be less inclined to pay 50-plus percent tax rates if they are not getting enough bang for their buck in New York. The verdict on that is likely a couple of years away.

Still, even if Texas sports betting includes a 30 percent tax, the revenue projections would skyrocket. Simply double the initial estimate, and you have your forecast. That number? Around $720 million per year. And in the event Texas can match New York’s rate, you’re talking about over $1.2 billion annually.

This sure seems like enough money to get lawmakers talking. Whether that is true—and actually matters—remains to be seen. But the Texas state legislature meets again in 2025. So we should know more about The Lone Star State’s betting timeline, or lack thereof, in a couple of months.

Take a look at this list of the top online sportsbooks so you can find one that works for all of your sports betting needs: