• About Us
  • Get Insights to Your Inbox
Saturday, May 10, 2025
Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
Search in posts
Search in Author
Search Events
Filter by Categories
Action Learning
Artificial Intelligence in Business
Book Club
Books
BU Today
Business Challenges
Business Education
Business Functions
Business Policy & Markets
Corporate Strategy
Digital Business
Digital Business Institute
Diversity, Equity & Inclusion
Entrepreneurship & Innovation
Events
Expert Take
Feature
Finance & Accounting
Future of Business Education
Future of Work
Global Media
Harvard Business Review
Health, Biopharma, & Health-Tech
Human Resources Policy Institute
Innovation
Insights Live
Institute for Sustainable Energy
Journals
Language of Business
Leadership & Management
Local Media
Marketing
Media Mention
Multimedia
National Media
Newsletter Spotlight
Op-Ed
Operations
Opinion
Our Insights
Partners in Business Ethics
Podcast
Publications
Research Institutes
Risk
ScienceDirect
Silicon Valley Bank
Sloan Management Review
Social Impact
Special Series
Susilo Institute for Ethics in the Global Economy
Technology
The Brink
Thinkers50@BUQuestrom: Passion & Purpose
Videos
Insights@Questrom
  • Our Insights
    • All
    • Business Challenges
    • Business Education
    • Business Functions
    Massachusetts Economy at Risk from Trump Administration Policies  

    Massachusetts Economy at Risk from Trump Administration Policies  

    Small businesses may take the brunt of tariffs, even when they’re based in the US 

    Retail’s latest tariff challenge? Setting prices. 

    Bureaucrats get a bad rap, but they deserve more credit − a sociologist of work explains why

    Bureaucrats get a bad rap, but they deserve more credit − a sociologist of work explains why

    Gordon Burtch Named Finalist for the 2025 Bradford-Osborne Research Award

    Gordon Burtch Named Finalist for the 2025 Bradford-Osborne Research Award

    Best Personal Loans for a 600 Credit Score

    Why have car insurance premiums been increasing over the past years? 

    Trump looking at cutting US drug prices to international levels, sources say 

    Trump looking at cutting US drug prices to international levels, sources say 

    Small businesses in the US may take the brunt of tariffs 

    Small businesses in the US may take the brunt of tariffs 

    Executive Insights: Ned Rimer, Faculty Director, Health Sector Management Program, Questrom School of Business, Boston University (video)

    Tariffs are expected to worsen the divide between Main Street and Wall Street 

  • Videos & Podcast
    • All
    • Podcast
    • Videos
    S1:E1 CVS Paying the “Pink Tax” on Certain Products and the Evolution of the Electric Vehicle Industry

    Tariffs and Their Economic Impact

    S1:E1 CVS Paying the “Pink Tax” on Certain Products and the Evolution of the Electric Vehicle Industry

    Navigating Internet Privacy: Unpacking Cookies, Dark Patterns, and Future Data Protection Challenges (2)

    Beyond Prototypes: Rethinking Innovation in Complex Ecosystems with Prof. Douglas Hannah

    Beyond Prototypes: Rethinking Innovation in Complex Ecosystems with Prof. Douglas Hannah

    Is Business Broken? Season 2 out now! 

    Is Business Broken? Season 2 out now! 

    S1:E1 CVS Paying the “Pink Tax” on Certain Products and the Evolution of the Electric Vehicle Industry

    Redefining Retirement: Navigating Emotional and Social Transitions with Insightful Strategies

    Life After Cookies: Who Uses Google’s Privacy Sandbox? – Garrett Johnson

    Life After Cookies: Who Uses Google’s Privacy Sandbox? – Garrett Johnson

    S1:E1 CVS Paying the “Pink Tax” on Certain Products and the Evolution of the Electric Vehicle Industry

    Real Estate Ripples from a Landmark Settlement

    S1:E1 CVS Paying the “Pink Tax” on Certain Products and the Evolution of the Electric Vehicle Industry

    The Hidden Wisdom of Cultural Pushback

    S1:E1 CVS Paying the “Pink Tax” on Certain Products and the Evolution of the Electric Vehicle Industry

    Fusion Strategy: Navigating the Industrial Evolution

  • Insights Events
    • Events
    • Insights Live
    • Questrom Institute Events
  • In the Media
    • All
    • BU Today
    • Global Media
    • Local Media
    • National Media
    • Op-Ed
    • The Brink
    Small businesses may take the brunt of tariffs, even when they’re based in the US 

    Retail’s latest tariff challenge? Setting prices. 

    Best Personal Loans for a 600 Credit Score

    Why have car insurance premiums been increasing over the past years? 

    Trump looking at cutting US drug prices to international levels, sources say 

    Trump looking at cutting US drug prices to international levels, sources say 

    Small businesses in the US may take the brunt of tariffs 

    Small businesses in the US may take the brunt of tariffs 

    Executive Insights: Ned Rimer, Faculty Director, Health Sector Management Program, Questrom School of Business, Boston University (video)

    Tariffs are expected to worsen the divide between Main Street and Wall Street 

    How AI Chat Search Could Disrupt Online Advertising

    Boeing aircraft, duty-free no more 

    How AI Chat Search Could Disrupt Online Advertising

    Compounding pharmacies must stop making versions of Ozempic and Wegovy as shortage ends 

    In a ‘work-from-anywhere’ world, where are people working?

    Rising drug prices are hammering patients, employers, and insurers. Is there any end in sight? 

    How Retailers Can Capitalize on the “Refund Effect”

    How to Monetize Volunteer-Driven Platforms 

  • Publications
    • All
    • Books
    • Harvard Business Review
    • Journals
    • Sloan Management Review
    How Retailers Can Capitalize on the “Refund Effect”

    How to Monetize Volunteer-Driven Platforms 

    How Retailers Can Capitalize on the “Refund Effect”

    Leading Global Teams Effectively 

    How Retailers Can Capitalize on the “Refund Effect”

    Research: When Prototypes Don’t Yield Useful Insights 

    Transforming Products into Platforms: Unearthing New Avenues for Business Innovation

    Transforming Products into Platforms: Unearthing New Avenues for Business Innovation

    How Retailers Can Capitalize on the “Refund Effect”

    We’re Still Lonely at Work

    How Retailers Can Capitalize on the “Refund Effect”

    17 Team-Building Activities for In-Person, Remote, and Hybrid Teams

    3 Ways to Support Employees with Bipolar Disorder

    3 Ways to Support Employees with Bipolar Disorder

    Will That Marketplace Succeed?

    Will That Marketplace Succeed?

    How Retailers Can Capitalize on the “Refund Effect”

    Research: Why Companies Should Disclose Their Lack of Progress on DEI 

  • Questrom Book Club
Insights@Questrom
  • Our Insights
    • All
    • Business Challenges
    • Business Education
    • Business Functions
    Massachusetts Economy at Risk from Trump Administration Policies  

    Massachusetts Economy at Risk from Trump Administration Policies  

    Small businesses may take the brunt of tariffs, even when they’re based in the US 

    Retail’s latest tariff challenge? Setting prices. 

    Bureaucrats get a bad rap, but they deserve more credit − a sociologist of work explains why

    Bureaucrats get a bad rap, but they deserve more credit − a sociologist of work explains why

    Gordon Burtch Named Finalist for the 2025 Bradford-Osborne Research Award

    Gordon Burtch Named Finalist for the 2025 Bradford-Osborne Research Award

    Best Personal Loans for a 600 Credit Score

    Why have car insurance premiums been increasing over the past years? 

    Trump looking at cutting US drug prices to international levels, sources say 

    Trump looking at cutting US drug prices to international levels, sources say 

    Small businesses in the US may take the brunt of tariffs 

    Small businesses in the US may take the brunt of tariffs 

    Executive Insights: Ned Rimer, Faculty Director, Health Sector Management Program, Questrom School of Business, Boston University (video)

    Tariffs are expected to worsen the divide between Main Street and Wall Street 

  • Videos & Podcast
    • All
    • Podcast
    • Videos
    S1:E1 CVS Paying the “Pink Tax” on Certain Products and the Evolution of the Electric Vehicle Industry

    Tariffs and Their Economic Impact

    S1:E1 CVS Paying the “Pink Tax” on Certain Products and the Evolution of the Electric Vehicle Industry

    Navigating Internet Privacy: Unpacking Cookies, Dark Patterns, and Future Data Protection Challenges (2)

    Beyond Prototypes: Rethinking Innovation in Complex Ecosystems with Prof. Douglas Hannah

    Beyond Prototypes: Rethinking Innovation in Complex Ecosystems with Prof. Douglas Hannah

    Is Business Broken? Season 2 out now! 

    Is Business Broken? Season 2 out now! 

    S1:E1 CVS Paying the “Pink Tax” on Certain Products and the Evolution of the Electric Vehicle Industry

    Redefining Retirement: Navigating Emotional and Social Transitions with Insightful Strategies

    Life After Cookies: Who Uses Google’s Privacy Sandbox? – Garrett Johnson

    Life After Cookies: Who Uses Google’s Privacy Sandbox? – Garrett Johnson

    S1:E1 CVS Paying the “Pink Tax” on Certain Products and the Evolution of the Electric Vehicle Industry

    Real Estate Ripples from a Landmark Settlement

    S1:E1 CVS Paying the “Pink Tax” on Certain Products and the Evolution of the Electric Vehicle Industry

    The Hidden Wisdom of Cultural Pushback

    S1:E1 CVS Paying the “Pink Tax” on Certain Products and the Evolution of the Electric Vehicle Industry

    Fusion Strategy: Navigating the Industrial Evolution

  • Insights Events
    • Events
    • Insights Live
    • Questrom Institute Events
  • In the Media
    • All
    • BU Today
    • Global Media
    • Local Media
    • National Media
    • Op-Ed
    • The Brink
    Small businesses may take the brunt of tariffs, even when they’re based in the US 

    Retail’s latest tariff challenge? Setting prices. 

    Best Personal Loans for a 600 Credit Score

    Why have car insurance premiums been increasing over the past years? 

    Trump looking at cutting US drug prices to international levels, sources say 

    Trump looking at cutting US drug prices to international levels, sources say 

    Small businesses in the US may take the brunt of tariffs 

    Small businesses in the US may take the brunt of tariffs 

    Executive Insights: Ned Rimer, Faculty Director, Health Sector Management Program, Questrom School of Business, Boston University (video)

    Tariffs are expected to worsen the divide between Main Street and Wall Street 

    How AI Chat Search Could Disrupt Online Advertising

    Boeing aircraft, duty-free no more 

    How AI Chat Search Could Disrupt Online Advertising

    Compounding pharmacies must stop making versions of Ozempic and Wegovy as shortage ends 

    In a ‘work-from-anywhere’ world, where are people working?

    Rising drug prices are hammering patients, employers, and insurers. Is there any end in sight? 

    How Retailers Can Capitalize on the “Refund Effect”

    How to Monetize Volunteer-Driven Platforms 

  • Publications
    • All
    • Books
    • Harvard Business Review
    • Journals
    • Sloan Management Review
    How Retailers Can Capitalize on the “Refund Effect”

    How to Monetize Volunteer-Driven Platforms 

    How Retailers Can Capitalize on the “Refund Effect”

    Leading Global Teams Effectively 

    How Retailers Can Capitalize on the “Refund Effect”

    Research: When Prototypes Don’t Yield Useful Insights 

    Transforming Products into Platforms: Unearthing New Avenues for Business Innovation

    Transforming Products into Platforms: Unearthing New Avenues for Business Innovation

    How Retailers Can Capitalize on the “Refund Effect”

    We’re Still Lonely at Work

    How Retailers Can Capitalize on the “Refund Effect”

    17 Team-Building Activities for In-Person, Remote, and Hybrid Teams

    3 Ways to Support Employees with Bipolar Disorder

    3 Ways to Support Employees with Bipolar Disorder

    Will That Marketplace Succeed?

    Will That Marketplace Succeed?

    How Retailers Can Capitalize on the “Refund Effect”

    Research: Why Companies Should Disclose Their Lack of Progress on DEI 

  • Questrom Book Club
Insights@Questrom
Home Our Insights Business Challenges Business Policy & Markets

Why March Madness is a special time of year for state budgets

Jay ZagorskybyJay Zagorsky
March 22, 2024
in Business Policy & Markets
19
0
Why March Madness is a special time of year for state budgets
Share on FacebookShare on TwitterShare on LinkedIn

Published: March 22, 2024 8:31am EDT

March Madness – the time when the best men’s and women’s college basketball teams challenge each other – is a made-for-television spectacle watched by millions. While March Madness has been around for decades, one of the tournament’s biggest changes happened in 2018, when the Supreme Court struck down the ban on sports betting.

Since then, legal sports betting has skyrocketed. Americans made US$120 billion of legal sports bets in 2023, according to the American Gaming Association, which promotes gambling. In 2024, the group predicts Americans will place $2.7 billion of legal bets on March Madness alone.

I am a business school professor fascinated by March Madness and sports betting. Studying sports betting has shown me how valuable it is for states short on cash. Unfortunately, it also has significant drawbacks, especially for gambling addicts and their families.

Why lawmakers love sports betting

As of March 2024, 38 states allow some form of sports gambling, and six more are debating the issue. State lawmakers are interested in sports gambling because they have a fiscal problem. State spending over time has increased in both absolute and per-person terms after adjusting for inflation.

Transparent, research-based, written by experts – and always free.

About us

While state spending is increasing, state revenue from so-called “sin taxes” has flatlined after adjusting for inflation. People are smoking and drinking less, reducing revenue from cigarette and alcohol taxes. Even lottery revenue has flattened out after growing strongly for decades.

Increased spending combined with a reluctance to raise taxes has led to a push to find new sources of revenue. That makes sports betting an appealing option to politicians.

The statehouse always wins

Billions of dollars are wagered on sports each year. More than 90% of the money bet goes to paying out winning gamblers. Gambling operators keep the rest, which they share with the states. The percentage kept, called the hold rate, has been steadily climbing over time, with 2023’s national average at 9.1% of the money bet.

State governments now collect about half a billion dollars each quarter, or about $2 billion a year, from sports gambling. That’s roughly one-fifth of that 9.1%.

If gamblers bet around $3 billion on March Madness, then states will pocket over $50 million dollars in extra revenue just from a three-week basketball tournament.

The ugly side of sports betting

Gambling is wonderful for state revenues and gaming-company profits. However, it has a dark side: While many people enjoy gambling, millions of Americans have a gambling problem.

Studies suggest between 1% and 2% of adults fall into this category. In Massachusetts, where I teach, a 2018 survey found that about 2% of adults were already problem gamblers, and a further 8% were at risk.

Meanwhile, the number of calls to the National Problem Gambling Helpline lasting more than a minute has increased sharply in recent years. While this doesn’t mean that problem gambling has become more common – among other issues, correlation isn’t causation – the increase very closely matches the steady rollout of online sports betting across the U.S.

Two possible policy solutions

Betting on sports was illegal before 2018. This forced gamblers to either bet with a bookie or an offshore site. Betting with a bookie before 2018 was a relatively slow process. Gamblers typically needed to pay for their bets upfront with cash and ran the risk their bookie would be arrested or shut down.

Today, in-play or live betting is legal and almost instantaneous. Bettors sitting on their couches at home can make multiple types of bets, such as which player will make the first shot in a basketball game. In business terms, sports gambling went from extreme friction to a completely frictionless experience.

To reduce the harms of sports betting, I propose two ways to reinject friction into the system. The first is to prevent credit cards from being used for online gambling. While not every state and bank allows credit cards to fund a sports betting account, many do. Those credit cards that allow it often treat gambling payments as a cash advance, which is very costly.

The U.K. banned credit cards for remote gambling in 2020, noting that people who used credit cards to gamble were disproportionately likely to be problem gamblers. Australia has also banned online bets made with credit cards. A few U.S. states, such as Massachusetts and Tennessee, have also instituted these sorts of bans, but most have not.

The second idea, which I prefer, is to revert to common practice before 2018 of using cash to bet. The idea is simple. Anyone with an online gambling account would need to prefund their account with cash. Winners would never have to stop gambling.

Bags of cash and printout of a March Madness schedule are seen on a police evidence table.
In this 2006 file photo, the Brooklyn district attorney’s office presents evidence used to arrest 10 men in a sports betting ring. New Yorkers can now legally bet on March Madness. Ramin Talaie/Corbis via Getty Images

Losers, however, would be forced to temporarily stop betting when their account runs out of money. Needing to take a break to go to a bank or simply pull money out of your wallet and hand it to someone would give people a chance to think about what they’re doing instead of being stuck in the moment of a bet-bet-bet mindset.

In theory, people could deposit cash into their accounts at any of the roughly 223,000 locations across the country that sell lottery tickets. To implement this idea, however, the federal government would need to change a law. Since 1955, it has imposed a special yearly tax of $50 on each person who accepts bets for profit.

The law exempts charities and state lotteries. This tax doesn’t raise much revenue already, since so few people are subject to it. It also reduces employment, as well as gambling companies’ interest in allowing in-person prefunding of accounts.

If you’re watching March Madness and betting on the tournament, I hope you win. But even if you don’t, at least your state government will.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Tags: Jay ZagorskyMarch Madnesssports betting
Jay Zagorsky

Jay Zagorsky

Jay Zagorsky is Clinical Associate Professor in Markets, Public Policy, & Law and is a cross-disciplinary researcher who has spent over two decades of researching a wide variety of personal wealth topics. He tries to explain why some people become rich, others are poor and some move between these two states. He is currently synthesizing this research into a book that presents the results of his academic research and other wealth researchers in an accessible format.

Related Insights

Push to roll back electric vehicle subsidies brings uncertainty for automakers 
Business Challenges

Lower gas, oil prices ‘a good news story for America’ amid inflation, tariff uncertainty 

April 10, 2025
State Laws Banning Abortion Linked to Increases in Mental Health Issues
Business Policy & Markets

Brink Bites: Studying Cigarette Restrictions, the Life of a Famed Poet, and Shifting Attitudes Toward Capitalism 

March 4, 2025
Could $5,000 DOGE stimulus checks really happen? Here’s what economists say 
Business Challenges

Could $5,000 DOGE stimulus checks really happen? Here’s what economists say 

March 2, 2025
Wendy’s plans to roll out dynamic pricing
Business Policy & Markets

Will Americans get $5,000 checks from DOGE savings like Trump, Musk claim? 

February 25, 2025
Analysis: Trump announced he is getting rid of the penny. What are the consequences? 
Business Policy & Markets

Analysis: Trump announced he is getting rid of the penny. What are the consequences? 

February 16, 2025
How AI Chat Search Could Disrupt Online Advertising
Business Policy & Markets

When prices fall in the PPI, do prices fall at the store? 

February 13, 2025

Upcoming Events

June 2025
Jun 07 2025

Mayor WU, BU Questrom Team Up to Host Civic Summit 2025

Boston University Questrom School of Business
No event found!

Get Our Insights Newsletter

Get Insights straight to your inbox by signing up now.

    Popular Insights

    • Massachusetts Economy at Risk from Trump Administration Policies  

      Massachusetts Economy at Risk from Trump Administration Policies  

      16 shares
      Share 6 Tweet 4
    • Ethical Implications of ChatGPT in the Educational Setting

      211 shares
      Share 84 Tweet 53
    • 2025 Digital Marketing Symposium: Sponsored by the Digital Business Institute

      8 shares
      Share 3 Tweet 2
    • Compounding pharmacies must stop making versions of Ozempic and Wegovy as shortage ends 

      8 shares
      Share 3 Tweet 2
    • 2025 Wadsworth Family Distinguished Lecture in Business Leadership & Technology Innovation – Peter Levine 

      8 shares
      Share 3 Tweet 2

    Boston University Questrom School of Business
    595 Commonwealth Avenue
    Boston, MA 02215

    Follow Us

    Newsletter

    © 2023 Trustees of Boston University

    • About Us
    • Digital Business Institute
    • Human Resource Policy Institute
    • Susilo Institute for Ethics in the Global Economy

    Welcome Back!

    Sign In with Linked In
    OR

    Login to your account below

    Forgotten Password?

    Retrieve your password

    Please enter your username or email address to reset your password.

    Log In

    Add New Playlist

    Generic selectors
    Exact matches only
    Search in title
    Search in content
    Post Type Selectors
    Search in posts
    Search in Author
    Search Events
    Filter by Categories
    Action Learning
    Artificial Intelligence in Business
    Book Club
    Books
    BU Today
    Business Challenges
    Business Education
    Business Functions
    Business Policy & Markets
    Corporate Strategy
    Digital Business
    Digital Business Institute
    Diversity, Equity & Inclusion
    Entrepreneurship & Innovation
    Events
    Expert Take
    Feature
    Finance & Accounting
    Future of Business Education
    Future of Work
    Global Media
    Harvard Business Review
    Health, Biopharma, & Health-Tech
    Human Resources Policy Institute
    Innovation
    Insights Live
    Institute for Sustainable Energy
    Journals
    Language of Business
    Leadership & Management
    Local Media
    Marketing
    Media Mention
    Multimedia
    National Media
    Newsletter Spotlight
    Op-Ed
    Operations
    Opinion
    Our Insights
    Partners in Business Ethics
    Podcast
    Publications
    Research Institutes
    Risk
    ScienceDirect
    Silicon Valley Bank
    Sloan Management Review
    Social Impact
    Special Series
    Susilo Institute for Ethics in the Global Economy
    Technology
    The Brink
    Thinkers50@BUQuestrom: Passion & Purpose
    Videos
    • Business Challenges
      • Business Policy & Markets
      • Digital Business
      • Diversity, Equity & Inclusion
      • Entrepreneurship & Innovation
      • Future of Work
      • Health, Biopharma, & Health-Tech
      • Risk
      • Social Impact
    • Business Functions
      • Corporate Strategy
      • Finance & Accounting
      • Innovation
      • Leadership & Management
      • Marketing
      • Operations
      • Technology
    • Publications
      • Journals
      • Harvard Business Review
      • Sloan Management Review
    • Insights Events
      • All Events
      • Insights Live
      • Questrom Institute Events
    • Videos & Podcast
      • Videos
      • Insights@Questrom Podcast
      • Podcast
    • Voices in the Media
    • Our Experts

    © 2023 Trustees of Boston University

    -
    00:00
    00:00

    Queue

    Update Required Flash plugin
    -
    00:00
    00:00