While Texans can’t legally bet on the Super Bowl in Texas, there is no doubt that they would if given the chance. And in a big way.
Currently, Texas sports betting is prohibited by the state constitution. However, PlayTexas projects that if sports betting were legal in the Lone Star State, Texans would likely bet over $204 million on the Super Bowl, generating more than $1.5 million in tax revenue.
Texas sports betting market is beyond compare
As all proud Texans will tell you, Texas is beyond compare. No state has as many pro and college sports teams with such rabid fan bases as Texas. Texas is large, populous and growing, and all of these facts make comparisons difficult.
The most comparable legal market to Texas is New York. With its high population and number of pro sports teams with passionate fan bases, it approaches Texas’s demographic. It doesn’t have the collegiate sports scene of Texas, but not many states do. It also–like Texas–doesn’t have the strong casino market of Nevada or New Jersey, both states whose per capita averages are national outliers.
Legal sports betting launched in New York in January 2022, and their first Super Bowl generated $14o million in betting handle. That resulted in a per capita Super Bowl betting average of $7. PlayTexas projects a similar $7 per capita average for the Lone Star State.
Using that average and Texas’s population of just over 29 million people, Texas could generate around $204 million in Super Bowl bets.
Super Bowl could generate more than $1.5 million in tax revenue for Texas
Hold is a fancy term that represents what percentage of the total amount wagered, known as the handle, is won by the sportsbook. In short, hold is the sportsbook’s profit. The average hold percentage for sportsbooks is about 7.25%. Taking a $204 million betting handle into account, Texas sportsbooks could see just over $15 million in profit.
If we hypothetically apply the 10% tax rate current Texas sports betting legislation has set, Texas would generate $1.5 million in tax revenue off the Super Bowl. If legislators were to adjust this tax rate up, as they could reasonably do, that tax revenue could double.
Three million dollars in tax revenue for a single football game then is not out of the picture.
Texas, California and Florida represent 50% of National Super Bowl bet revenue
Texas, along with Florida and California–the country’s three most-populous states–prohibit all forms of sports betting. Were that not the case, they could generate over $540 million in total betting handle for the Super Bowl. That accounts for nearly half the total handle for all legal markets in the country.
Further, Californians and Texans travel to neighboring states with legal sports betting–Texans travel to Louisiana, Arkansas and Colorado; Californians (and Texans) go to Vegas. As such, without legal markets, states like California and Texas are inflating the revenues for adjacent states during the Super Bowl.
Were sports betting legalized in Texas, Super Bowl betting handle could be even higher if Texas bettors establish new Super Bowl traditions that don’t involve weekend trips out of state to watch the game.
Without a legal market, Texans turn to dangerous offshore books
While Texans don’t have a legal option for betting on the Super Bowl, that does not mean they aren’t placing Super Bowl bets. They are, and none of those bets generate a single dollar of tax revenue for the state.
As mentioned, many Texans are traveling to other states to place bets. Or, more worryingly, they’re betting online at offshore sports books. These illegal books don’t answer to any regulators, and they have no requirements to address problem gambling concerns. Bettors are left to the whims of black market businesses with no assurances that their money and personal information are actually safe.
A Cowboys Super Bowl and the Mattress Mack effect
Sadly, Dallas Cowboys fans watched their team execute another playoff meltdown this year against the San Francisco 49ers. But what if they’d won and won again and made it to the Super Bowl? Would a Cowboys Super Bowl team have led to a betting spike? And would that spike have represented a sizable boost in handle? It’s tempting to debate this question for a couple reasons.
First, the Dallas Cowboys might be the most recognizable sports team in the world. Indeed, their Texas fanbase is second to none. Add to that Texans’ natural predilection for betting on themselves, and a Cowboys Super Bowl appearance could boost handle by a few percentage points.
Eric Ramsey, market analyst for Catena Media, provided context on just how far-reaching the Cowboys fan base goes:
“It’s hard to know exactly how much impact the Cowboys would have on local betting interest in the Super Bowl, but logic would tell us that it should be significant. The largest fanbase in the NFL could conceivably move the needle in a number of states all across the map, in fact–not just in Texas.”
Second, Jim “Mattress Mack” McIngvale, the Houston furniture magnate who has made record-setting bets to offset major furniture promo deals, would surely lay down huge cash on the game. If his track record can be said to follow a progression, a $15 million Super Bowl bet is not beyond the realm of possibility. Last Super Bowl, he bet, and lost, $9.5 million on the Cincinnati Bengals. Last World Series–featuring his hometown Houston Astros–led to $10 million in bets. Could he up the ante on those wagers if the Cowboys, his self-professed lifelong team, landed in the Big Game?
Ramsey also provided some context on McIngvale’s extreme outlier status:
“We don’t often need to consider the impact of a single sports bettor in a forecast, but Mattress Mack is in a different category. Whichever market gets his Super Bowl bets will see a noticeable bump in handle, and it would obviously be a boost for Texas if he didn’t have to leave home to get his money down at a legal sportsbook.”
McIngvale has not shied away from hyping up his bets, and the hype seems to be growing. In fact, he generated so much attention during the World Series last year that he had to shut down his usual furniture promos when he realized that his potential bet wins wouldn’t cover the cost of all the mattresses he planned to give away if the Astros won. Will he account for that hiccup this Super Bowl, and will a sports book take on his massive bets?
Such questions are merely amusing potentialities, but they point to two truths: the Texas betting market is very large, and high rollers like McIngvale make it difficult to quantify.
The Legislative pathway to legal sports betting
The 88th Texas Legislature gaveled in their biennial session on Jan., 10th. So far, one sports betting resolution has been filed. SJR-17, filed by Sen. Carol Alvarado, would legalize casinos and retail sports betting. The resolution has the bipartisan support of Rep. John Kuempel, who will sponsor it in the House. An online sports betting bill crafted by the Sports Betting Alliance and authored by a lawmaker yet to be named is forthcoming.
With 300 lobbyists working feverishly in Austin to educate legislators on the perils of the illegal betting market and the need to regulate it, the odds are the best they’ve ever been for legislation to pass the legislature. The climb is steep though as both online and retail sports betting would require a constitutional amendment and a two-thirds majority vote in both houses to send the issue to the November ballot.
However, a PlayTexas survey indicates that if sports betting legislation reached the Texas ballot, a majority of Texans would support it.
