How PASPA’s Overturning Has Altered The USAs Economy

The Professional and Amateur Sports Protection Act (PASPA) was in place from 1992 until it was overturned on May 14, 2018. PASPA prohibited states from authorizing or operating sports betting schemes. The only exceptions were states that already had sports betting before 1992, but few did.

Once the law was overturned in 2018, the US economy reacted in numerous ways. Read on to find out how.

The Professional and Amateur Sports Protection Act Explained

Signed by President George H. W. Bush, the PASPA Act placed a blanket ban on legal sports betting. Four states were exempt from the powers of the act because they already had strong regulations for some form of sports betting or sports lottery. Those states were:

• Nevada
• Oregon
• Delaware
• Montana

Oregon, Delaware, and Montana all had limited forms of sports-related wagering but still qualified for exemption from the act. Nevada had a full-scale sports betting industry.

The basis of the act was to protect the integrity of sports and prevent state-sponsored gambling on sports events. At the time, a group of congressmen believed legal betting could corrupt the industry, leading to match-fixing, loss of public trust, and generalized corruption within professional and College sports. And they weren’t wrong. Match-fixing is still an issue to this day, but sports betting isn’t necessarily the cause.

Interestingly, PASPA didn’t make sports betting a federal crime for individuals. The focus was on forbidding states and local governments from:

• Sponsoring
• Operating
• Advertising
• Authorizing sports betting

Through PASPA, the government prevented states from deciding their own gambling laws.

The law remained in place until 2012, when New Jersey challenged the concept and rules of the PASPA Act. Lawmakers argued the act violated the Tenth Amendment, which protects states’ rights to make their own laws. In 2018, the trial went to the US Supreme Court under the title Murphy v. NCAA (2018). 

And on May 14, 2018, the Supreme Court voted in favor of removing PASPA, ruling that it was unconstitutional. The court also ruled that the federal government could not control states and force them to keep sports betting illegal.

The Growth of the Regulated Sports Betting Industry

Naturally, the sports betting industry exploded. Now, gambling is commonplace online, with 4,627 global casinos and online gambling businesses as of 2025 (IBISWorld). As of September 2024, 38 US states have legalized sports betting to some degree.

Since PASPA was dropped in 2018, sports betting in the US has gone from generating $400 million in 2018 to over $11 billion in 2023 (Statista). In terms of wagering, Americans spent $121.1 billion in 2023, a number that jumped 23.5% ($28.5 billion) to $149.6 billion in 2024. Total gross revenue for sportsbooks increased 24.4% from $11.0 billion to $13.7 billion (CBS Sports). 

And looking at the American Gaming Association’s (AGA) Commercial Gaming Revenue Tracker, August commercial gaming industry revenue reached $6.46 billion, 14.6% higher than the previous year. Those numbers cover traditional casino games, sports betting, and iGaming and make the best August performance on record.

According to Statista, sporting events like the Super Bowl or the World Series cause spikes in wagering, with 1/4 of American adults placing a bet on the Super Bowl LVIII.

Tax Revenue and State Budgets

Legalizing online sports betting created the opportunity for states to create new revenue streams through taxes and state budgets.

The taxes vary massively depending on the state. Nevada charges one of the lowest tax rates at 6.76%, and New York, New Hampshire, and Rhode Island took it to excessive extremes by enforcing a 51% tax rate on sports betting revenue.

Other states use sports betting taxes as a way to patch holes in their budget. Illinois, Maryland, Ohio, and New Jersey have all increased tax charges on sports betting since the overturning of PASPA, as state legislatures view gambling as a “vice” and implement a so-called “sin tax” that essentially punishes businesses and individuals for gambling through excessively high tax rates.

According to Census.gov, as of September 2025, the national total of state tax revenue so far for 2025 reached $917 million, up from $261 million by the end of Q4 2021.

Job Creation and Business Opportunities

According to Oxford Economics, the US sports betting industry now supports over 200,000 jobs and contributes over $20 billion to the national economy. Some of the industries that are actively hiring include:

• Technology
• Analytics
• Compliance
• Media

The demand for software engineers, for example, surged. There’s a trend of iGaming businesses competing to build faster, more secure betting platforms that can handle real-time wagers on high-traffic events. And that’s causing more open job positions than the industry has ever had.

Interestingly, stadiums, sports networks, and data companies have all found new business models. They’re making sponsorships, branded integrations, and live-data distribution.

The result is a new sports-tech ecosystem that connects betting, entertainment, and fintech under one roof.

PASPA’s overturning has undoubtedly changed the US economy. It has grown the market astronomically, and year-on-year, it only seems like it’s increasing in terms of revenue and betting wagers. If states were as accommodating towards iGaming platforms, the economic growth would be huge.