According to a recent study commissioned by the online gaming operator Bodog, five of the nation’s biggest states are forgoing billions of dollars in potential tax revenue by refusing to legalize regulated online casino and sports‑betting markets.

How the estimate was calculated

The analysis used 2025 revenue figures from states with mature online gambling programs—New Jersey, Pennsylvania, Michigan and Connecticut—and adjusted them for population size. By dividing each state’s combined iGaming and sports‑betting revenue by its adult population (estimated at 78 % of total residents), the study derived a per‑adult spending benchmark of roughly $435. To avoid overstating demand in states without a market, the figure was discounted by about 10 %, resulting in a conservative estimate of $390 per adult.

Multiplying that benchmark by the adult population of each non‑participating state yields the projected annual market size. California, with the largest adult population, tops the list at an estimated $12 billion in gross online gambling revenue, which could generate between $1.2 billion and $2.4 billion in state tax revenue depending on the tax rate applied. Texas follows with an estimated $9.5 billion, while Georgia and Minnesota each sit near $1.8 billion.

States left on the table

The five states identified are:

• California – projected $12 billion market, potential tax revenue of $1.2‑$2.4 billion.
• Texas – projected $9.5 billion market, no current legislation.
• Georgia – roughly $1.8 billion, despite a recent House vote that fell short of the required 120 votes to amend the state constitution.
• Minnesota – about $1.8 billion, despite recent efforts to target offshore operators and prediction‑market activity.
• Florida – already offers legal mobile sports betting through a tribal compact, so its estimate uses a lower casino‑only benchmark, still yielding a sizable market.

South Carolina, Alabama and Utah rank just outside the top five, with projected revenues ranging from $1.1 billion to $1.7 billion. Utah’s constitution outright bans gambling, while Hawaii, the only other state without any legal gambling, would generate roughly $440 million under the same model.

Why the money matters

The American Gaming Association estimates that illegal and unregulated gambling generates $53.9 billion in revenue nationwide, depriving states of more than $15 billion in tax revenue each year. Offshore sports‑betting alone accounts for an estimated $84 billion in handle and about $5 billion in revenue.

Even with a modest 10 % tax rate, California’s projected market could add $1.2 billion to the state budget—funds that could support schools, infrastructure, or family‑focused programs. A higher rate of 20 % would double that contribution.

Legislative roadblocks

Both Texas and California have seen multiple legislative attempts to legalize online gambling fail. Texas’ 2025 legislative session adjourned without advancing any gambling bills, and the next realistic opportunity won’t arrive until 2027. In California, a ban on sweepstakes‑style platforms took effect on January 1, 2026, further limiting avenues for regulated play.

Georgia’s House rejected a constitutional amendment for sports betting in March, falling short of the supermajority needed. Minnesota, while experimenting with offshore‑focused legislation, still lacks a regulated online sportsbook or casino.

What this means for families and communities

Legal, regulated markets can provide consumer protections, ensure that gambling proceeds are taxed responsibly, and direct a portion of the revenue to community‑benefiting initiatives. By keeping gambling underground, states miss out on both fiscal resources and the ability to enforce safeguards that protect families from problem gambling.

While demand for gambling varies by region—tourism, tribal casino presence, and neighboring‑state access all influence actual spend—the per‑adult benchmark offers a useful snapshot of the scale of missed opportunity.

Looking ahead

Stakeholders, including tribal partners, business leaders, and family‑focused advocacy groups, are urging state legislatures to reconsider their positions. The potential tax revenue could help fund traditional family programs, support faith‑based community services, and reinforce the constitutional principle of states’ rights to regulate commerce within their borders.

Until lawmakers act, the projected billions will remain on the table, continuing to flow to unregulated operators and out‑of‑state platforms.

Original reporting: El Paso News (HLL/CB) — read the source article.