Super Bowl betting soars, but it's still not legal in Chiefs and 49ers home states

Caption

Taylor Foehl (left), of Boston, looks at a mobile betting app on his phone after placing a wager, while watching a men's college basketball game at the Cask 'N Flagon sports bar on March 10, 2023, near Fenway Park in Boston. / AP

Americans are expected to spend a record-setting amount placing bets on the outcome of this year's Super Bowl.

But many fans of the Kansas City Chiefs and the San Francisco 49ers won't get the chance to make a legal wager.

That's because California and Missouri are two of a dozen states that have not yet legalized sports gambling amid its explosion across the U.S. over the past few years.

"I think the low- and most of the medium-hanging fruit has been picked here," Becca Giden, director of policy at the gambling research firm Eilers & Krejcik Gaming, said of the majority of states that had legalized sports gambling.

"These last few [states], most of them I would say it's a when and not an if" they pursue legalization, Giden added.

The American Gaming Association estimates that 42.7 million U.S. adults will bet on this year's Super Bowl online, at a sportsbook or with a bookie. That's up more than 40% from last year.

More people are legally wagering on sports as more states legalize the practice, which is permitted at the federal level but up to individual states to regulate.

Thirty-eight states and Washington, D.C. have legal sports betting operations, according to an AGA tally, while several others are considering measures to allow it.

This year's Super Bowl will be the first one to take place in the country's gambling capital: Las Vegas.

But in the two contenders' home states — as well as in other jurisdictions such as Texas, Minnesota and South Carolina — betting on sports remains illegal.

Why haven't California and Missouri legalized sports betting?

The U.S. Supreme Court struck down a nationwide ban on sports betting outside of Nevada in 2018, and since then there's been a rush among many state legislatures to legalize sports betting — a potentially lucrative new source of tax revenue.

But not every state has taken the field.

Geoff Zochodne, a journalist who covers sports betting for Covers.com, says there's no single reason those states haven't legalized sports betting yet. Rather, it's often local issues and attitudes that influence a state's legislative process.

"I've been watching various states go through debates around legalizing sports betting, and there are always these unique concerns in each state about legalization that are raised by the various interested parties that are there," Zochodne said.

In California, voters in a 2022 election rejected two measures that could have legalized sports betting in the country's largest state.

Proposition 26 would have permitted sports betting at tribal casinos, but it faced pushback from cardroom operators who worried about a provision allowing private citizens to sue companies over state gambling law violations.

The second ballot measure, Proposition 27, would have allowed online sports gambling, a measure backed by companies such as FanDuel and DraftKings but opposed by the Native American tribes that own and operate the state's casinos.

Another try at legalization was scrapped just last month over a lack of tribal support.

The Missouri House of Representatives approved a bill last year to legalize sports betting, but it never came up for a vote in the Senate.

The stalemate there largely has to do with one Missouri lawmaker's effort to combine the legalization of sports betting with the expansion of video gambling terminals at places like veterans and fraternal organizations, KCUR reported.

But renewed legalization efforts could be in the cards for Missouri this year.

A House committee approved a bill to legalize sports betting earlier this month, and a coalition of professional sports teams in the state — including the Chiefs — is hoping to put the issue directly to voters through a ballot measure.

Odds are the U.S. sports betting industry will grow. What's at stake?

In just a few years, sports betting has become legal in a majority of states and ballooned into a multibillion-dollar industry — and it appears likely to continue to grow.

Giden, of the gambling research firm, said sports betting is "by far the fastest expansion for a gambling product in the United States in all of our history that I can tell."

The sudden surge of legalized sports betting in the U.S. has worried some advocates who've warned about a spike in problem gambling, but it's also created a windfall for many states that have decided to regulate and tax it.

According to the financial information website The Motley Fool, states have collected more than $4.3 billion in tax revenue since the Supreme Court lifted the sports betting ban in 2018.

California and Missouri will miss out on legal sports betting revenue during this year's Super Bowl. But according to Zochodne, having your home team emerge victorious in a Super Bowl isn't always a winning financial proposition for sportsbooks.

When local fans overwhelmingly bet on their home team to win the big game, sportsbooks have to pay out major winnings. Even though Super Bowl Sunday is a golden opportunity to gain new customers, operators may lose money.

Last February, when the Chiefs beat the Philadelphia Eagles to win the Super Bowl, regulators one state over in Kansas reported no revenue from in-person sports betting for the month and just $35,000 in revenue from online bets.

One month earlier, sportsbooks claimed nearly $6 million in combined revenue.

"You can't say for certain that's exactly why," Zochodne said, "but it's a very strong indication that the Chiefs winning the Super Bowl really dealt a financial blow there."