Sports betting operates differently across the United States, with each state setting its own rules, tax rates, and licensing requirements. As of October 2025, thirty-eight states and Washington D.C. permit some form of sports wagering, though the actual experience varies considerably depending on where you place your bets. The differences between states affect everything from how many sportsbooks you can choose from to the types of bets you can make on college games.
Market Leaders and Their Distinct Approaches
New Jersey runs the most competitive sports betting market in the country, with over twenty licensed operators competing for customers. The state collects 13% tax on online bets and 8.5% on retail wagers, generating over $700 million in projected tax revenue for 2025. Bettors in New Jersey benefit from this competition through better odds and frequent promotional offers, though they cannot place prop bets on New Jersey college teams. The state's early June 2018 launch gave it a head start that still shows in its market maturity.
New York takes a different approach with its nine mobile operators paying a 51% tax rate on gross gaming revenue. This high tax brings the state nearly $1 billion in expected tax revenue for fiscal year 2025, making it one of the largest revenue generators nationwide. The steep tax means operators have less money for promotions compared to other states. A pending bill, S 9044-A, would raise the fantasy contest age to 21 and could add another $150 million in annual revenue. Like New Jersey, New York prohibits prop betting on college games.
Pennsylvania strikes a middle ground with thirteen mobile sportsbooks operating under a 36% tax rate. The state averages over $350 million per year from sports betting taxes while maintaining a broad betting menu. Illinois recently changed its tax structure from a flat 15% to a graduated system that reaches 40% based on operator revenue, expecting to exceed $450 million in tax collection. Both states allow various forms of college betting with restrictions, such as Illinois requiring in-person wagering at retail locations for in-state college games.
Regional Tax Variations and Market Entry Timing
States continue adjusting their tax structures to balance operator profitability with revenue generation, creating distinct regional patterns across the country. Illinois moved from a flat 15% to a graduated system reaching 40% in July 2025, while Iowa maintains its 6.75% rate to attract more operators. This variation means bettors in lower-tax states often see better promotional offers and odds, as operators keep more of their revenue. The timing of market launches also affects competitive dynamics, with early-adopter states like New Jersey establishing dominant positions while newer markets work through regulatory frameworks.
States launching in 2025 and 2026 face different market conditions than those that opened years earlier. Sports betting in Missouri will begin operations in summer 2025 following voter approval, entering a mature national market where operators have refined their strategies. North Carolina's March 2024 launch tied licenses to professional sports venues, creating a different competitive structure than open-license states. Oklahoma's pending tribal-exclusive bills and Texas's stalled legislation show how political factors shape market entry timing. These regional differences in tax rates, licensing models, and launch dates create distinct betting environments across state lines, affecting everything from available promotions to the number of competing sportsbooks.
States Where Competition Benefits Bettors
Colorado, Arizona, and Indiana represent markets where extensive competition among operators creates favorable conditions for bettors. Colorado allows up to twenty-five mobile operators with a 10% tax rate, giving sportsbooks room to offer competitive odds and promotions. Arizona follows a similar model with multiple operators and regular promotional campaigns. Indiana's 9.5% tax rate and open licensing system create an environment where bettors can shop for the best lines across numerous platforms.
Iowa's 6.75% tax rate ranks among the lowest in the nation, and the state eliminated its in-person registration requirement early, making it easier for bettors to sign up. Ohio launched both online and retail betting in January 2023 with twenty-two online skins allowed and a 10% tax rate, building strong consumer protections into its framework. Massachusetts entered the market in 2023 with eight mobile operators and a 15% tax rate, though it restricts in-state college betting except during tournament play.
Limited License Markets and Their Trade-offs
Some states restrict the number of available licenses, which affects market dynamics differently. Tennessee operates an online-only market with ten operators paying a fixed $750,000 annual fee and facing a 10% hold requirement. Virginia caps licenses at twenty and prohibits in-state college betting. Connecticut works with two tribal entities that partner with commercial operators, creating a controlled but stable market.
Oregon takes the most restrictive approach with a single state-run mobile option through the Oregon Lottery, eliminating operator competition entirely. Montana limits mobile betting to lottery-run operations at licensed bars and kiosks. These restricted markets often provide fewer betting options and less competitive odds, though they maintain tighter regulatory control.
States Without Legal Sports Betting
Several states still prohibit sports betting entirely as of October 2025. Alabama's lottery and sports package failed to reach the required super-majority, pushing any potential vote to 2026. Georgia passed legislation in the Senate, but the House adjourned without voting. Minnesota maintains tribal exclusivity without statewide mobile options. Utah, Alaska, Idaho, and Hawaii have no active framework or pending legislation.
California operators and tribes continue negotiating for a potential 2026 ballot initiative after multiple failed attempts. Texas lacks the votes for a November 2025 ballot measure according to the Lieutenant Governor. These holdout states represent billions in potential betting handle that remains untapped.
What Makes a State Optimal for Sports Betting
The best state for sports betting depends on your priorities as a bettor. States with numerous operators and lower tax rates typically offer better odds, more betting options, and regular promotions. New Jersey, Colorado, and Arizona provide deep markets with extensive competition among operators. Their regulatory frameworks protect consumers while allowing market forces to benefit bettors through competitive pricing.
High-tax states like New York and Pennsylvania generate substantial revenue for state programs but may offer fewer promotions and slightly worse odds due to operator costs. States with limited licenses or single-operator models provide less choice but maintain stable, regulated environments. The presence or absence of college betting restrictions also matters for many bettors, particularly during March Madness or football season.
As Missouri prepares to launch and other states consider legislation, the national sports betting map continues developing. Each state's combination of tax rates, licensing structures, and regulatory choices creates unique betting environments that serve different priorities. Bettors benefit most from understanding these differences and choosing states that align with their preferences for variety, odds quality, and available betting markets.