Fans Love March Madness, But So Does Your State Government
March Madness is the collective name coined for the men’s and women’s NCAA basketball tournaments. Each respective tournament is a 64-team seven-round gauntlet to determine the national champion. Each year, the March Madness tournaments are one of the most heavily watched sporting events on television. But they’ve also become one of the most heavily wagered sporting events in the country.
Currently, there are two legal ways you can bet on a professional or college game. You can visit a casino where many offer what are called “sportsbooks” to place a wager on your game of choice. The second way is online. Many casinos now have their own online sportsbooks. There is also a growing list of companies – such as DraftKings or FanDuel, among others – that offer legalized sports gambling.
The NFL’s Super Bowl is the most heavily wagered single game in the U.S. For the 2025 Super Bowl between the Kansas City Chiefs and the Philadelphia Eagles, the American Gaming Association (AGA) estimates Americans wagered a record-high $1.39 billion in legal bets on that one game. But when you include non-legal bets, that number jumps to more than $23 billion, according to the AGA. Non-legal betting includes using a bookie, unregulated or offshore betting sites, casual bets between friends and the ever-popular square pools and tournament brackets.
By comparison, March Madness is the most heavily wagered sporting “event” in the country. For this year’s men’s and women’s tournaments, the AGA expects a record $3.1 billion will be legally wagered. This is up nearly 15% from last year. The AGA won’t disclose its estimate on non-legal gambling during March Madness. However, experts project there will likely be tens of billions of dollars more wagered illegally over the course of the tournament games.
Legal sports betting has become big business. The ongoing surge in sports betting can be traced back to the 2018 U.S. Supreme Court decision that struck down the federal ban that prohibited wagering on sporting events. This single court decision immediately opened up a floodgate of casinos, companies and cash-infused investors willing to step in and satisfy Americans’ desire to bet on sports. Today, sports betting is allowed in 38 states plus the District of Columbia. Both Illinois and Iowa are two of those states that allow legal sports betting.
Last year, according to the AGA, Americans placed $149.7 billion in legal wagers on professional and college sporting games. These wagers generated a record-high $13.7 billion in revenues for the gaming industry, a massive 25.4% increase from 2023. But the gaming industry wasn’t the only recipient of a financial windfall. State governments also collected substantial tax dollars from the sports betting industry.
According to the Illinois Gaming Board, last year, the State of Illinois collected a record $263.8 million in taxes from sports betting. This is up 75% from the $150.3 million collected in 2023. Illinois has heavily embraced sports betting as a source of revenue. In 2024, bettors placed $14.02 billion in sports wagers in Illinois, a 20.7% increase from 2023. Illinois is now the No. 2 state in the nation in terms of sports betting, second only to New York. Last year, New York led the nation with $22.7 billion being wagered on sports games.
The State of Iowa also saw a sizable increase in sports betting. According to the Iowa Racing & Gaming Commission, $2.77 billion was wagered on sports games last year, up 14% from 2023. This generated a hefty $14.76 million in taxes collected by the State of Iowa.
For sports fans, the March Madness tournaments always bring a level of fun and excitement. For many of those fans, that fun and excitement translate to betting on the games. Some will win; many others will lose. But state and local governments are perhaps the biggest winners from the tax revenues that sports betting adds to their coffers.
Mark M. Grywacheski, Investment Advisor
Quad Cities Investment Group is a Registered Investment Adviser.
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