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Lotteries and Sports Betting – A Growing American Partnership

Sports betting may be completely different from their traditional products, but lotteries have applied their dedication to raising revenue for good causes and their expertise in player protection to the country’s latest expansion of gambling.

April 23, 2024 

By Patricia McQueen

NASPL Insights Online


The floodgates opened for legal sports betting in the U.S. after the 1992 Professional and Amateur Sports Protection Act (PASPA) was declared unconstitutional by the U.S. Supreme Court in 2018. In 2023, sports betting handle in 32 jurisdictions (including Nevada) surpassed $121.5 billion, generating gross gaming revenue of more than $11 billion. That’s a lot of revenue distributed to operators and state and local governments (either in the form of direct taxes or through lottery revenue sharing models).


Lottery-operated or lottery-regulated sports betting in 12 jurisdictions accounted for about 12.6% of that handle, or more than $15.3 billion. There are many different models in the industry, with lotteries serving as operators, regulators, or some combination of both. To help navigate the waters, we present this overview of sports betting under the lottery umbrella.



The Connecticut Lottery is in a unique position of operating sports betting in a state that houses two of the largest casinos in the country, each with its own sports betting license. While Foxwoods and Mohegan Sun generate the lion’s share of sports betting revenue in Connecticut through their online/mobile platforms, the Lottery is making strides and is poised to move forward in a big way with new partner Fanatics after a mutually agreeable breakup last fall with the previous provider, Rush Street.


All gaming operators in Connecticut, including the Lottery, are regulated by the state’s Department of Consumer Protection. They approve and license all the companies involved, issue occupational licenses, release industry statistics, and more. Sports betting revenues are taxed at a rate of 13.75% regardless of operator; all taxes go to the state’s General Fund.

While all three operators have online/mobile sports betting throughout the state, the tribal casinos’ retail options are limited to the confines of their reservations. The Connecticut Lottery, however, can have up to 15 retail sportsbooks; the only restriction is that they cannot be close to the reservations. Ten sportsbooks are currently open, and while Fanatics handles almost everything on the online/mobile platform, the Lottery owns the retail sports betting product and takes an active role as required by law. Some of those are off-track betting locations operated by Sportech, which has proven to be a good partnership.


While Sportech provides staffing at its locations, the Connecticut Lottery provides employees to handle sports betting in the other locations. “We are really boots on the ground,” explains Director of Sports Betting Andrew Walter. Among those other locations are the XL Center (an arena and convention center in Hartford) and Total Mortgage Arena in Bridgeport; opening soon should be a classic sports bar. “We know where there’s an appetite for retail sports betting, and our retail footprint is actually really significant.”




It’s no surprise that Delaware was the first state to offer sports betting after the repeal of PASPA, going to market on June 5, 2018, nine days before New Jersey was up and running. After all, Delaware was one of four states already allowed to do limited sports betting prior to that repeal, having been grandfathered in with previous sports offerings before PASPA. (The other states were Montana, Nevada and Oregon.)


In the modern era, the Delaware Lottery started football parlay bets in 2009, first at the state’s three casinos, then with selected retailers as well. Just last year, that option grew with the addition of expanded parlay bets for other sports and an expanded selection of retailers (currently with 66 locations); it was rebranded Sports Pick. In calendar 2023 for the first time, handle on retail parlays exceeded handle at any of the three casinos. An added benefit for the State of Delaware is that parlays are more profitable than traditional sports betting.

The Delaware Lottery has always taken a hands-on approach with gaming, and sports betting is no exception. Overseen by Deputy Director Barbara Miller, the retailers with parlay betting are simply part of the lottery’s retail network, and even the casinos don’t interact directly with the retail sports betting vendor, Scientific Games, with the parlay and single-bet options at their facilities. Everything is handled through the Lottery’s Sports Product Manager, Amy Lunsford.


While Delaware was a pioneer in facility-based sports betting, it was a late arrival on the online/mobile scene. On January 3, the casinos formally launched online and mobile sports betting for the first time with BetRivers. “We are resilient in that we are surrounded by bordering states that took the helm with launching mobile sports first, and that put us under a lot of pressure,” explains Miller. The goal, as with any lottery, is to maximize revenue to the state, and for Delaware, that meant putting mobile sports under the existing iGaming umbrella rather than pair it with the retail offerings.


Yet even with that development, the Lottery plays a key role. The casinos still do not work directly with the vendor, in this case Rush Street – they work through the Lottery’s iGaming Program Manager, Rebecca Satterfield, who manages the mobile sports platform as well.


“We are the pioneer! Keeping in mind our mission/goals, we are unique and have adapted to pretty much every sports betting challenge in the industry, and adapted quickly,” says Miller.



District of Columbia

In the most complex sports betting implementation to date, the District of Columbia, with only about 61 square miles of land, has both lottery-operated sports wagering through a District-wide platform and lottery-regulated sports wagering through private operators.


The DC Office of Lottery and Gaming (OLG) comprises:

  • DC Lottery as the lottery operations arm.

  • FanDuel, the District-wide mobile and online sports wagering platform.

  • The Division of Regulation and Oversight that regulates all gaming activities in the city, including sports betting, charitable gaming, and games of skill.


On May 28, 2020, the OLG launched GambetDC, its own District-wide online and mobile sports betting platform. Following this, GambetDC self-service kiosks at select retail locations were added. In April 2024, Intralot, OLG’s lottery and sports wagering vendor, announced FanDuel as its new subcontractor; on April 15, FanDuel replaced GambetDC as the District’s mobile app and website operator.


If anyone ever doubts the capabilities of geo-fencing, sports betting in the District of Columbia will erase those doubts. FanDuel’s sports wagering platform is available to users over the age of 18 within the District’s geographic boundaries, except on all federal lands (where gambling is prohibited) and the designated Class A sports betting facilities, which also have a surrounding two-block exclusivity zone. Those facilities include Audi Field, Capital One Arena, Nationals Park, and St. Elizabeths East Entertainment and Sports Arena, although Audi Field’s operator of choice is also FanDuel.


As a regulator, OLG oversees private operators – the Class A licensees mentioned and Class B licensees that include sports bars and other local businesses (there are now five such locations, three of which just recently opened). All pay a monthly 10% tax on gross gaming revenue. Capital One Arena was the first private operator to launch in July 2020. OLG licenses these operators (and their suppliers and employees) and ensures ongoing compliance with all laws and regulations for sports betting in the District.


All private operators offer both on-site sports wagering and online or mobile betting, although online/mobile wagering may only be offered within the confines of their facilities (and in the exclusivity zone in the case of Class A operators).


Due to these unique circumstances, exceptional care is taken to ensure that all parties, both lottery-run sports wagering and private businesses, operate under the same set of rules and that appropriate safeguards are in place to facilitate this.




The Kansas Lottery plays a unique role in casino gaming and sports betting compared to other jurisdictions. By law, the Lottery must own and operate all the “instruments” of gaming – all gaming equipment in the state’s four commercial casinos, for example. The Kansas Lottery also owns the revenue generated from gaming and sports betting activities, and hires a manager to oversee each casino’s day-to-day activities. By statute, the Lottery pays those managers a fee of approximately 73% of casino gaming revenue and 90% of sports wagering revenue; the state retains 27% of the net casino revenue (5% of that goes to localities and a problem gambling fund) and 10% on sports betting. With sports betting, those casino managers enter into contracts with and directly pay the platform providers from their share of revenue, and those contracts have to be approved by the Kansas Lottery. The Lottery also approves all promotions and advertising for both gaming and sports wagering, and has onsite analysts for financial auditing.


There is, however, another level of regulation for gaming and sports in Kansas – the Kansas Racing & Gaming Commission. They actually serve as a more traditional regulator, ensuring compliance with laws and performing all licensing and related functions for both casino gaming and sports betting operations.



If the District of Columbia’s implementation of sports betting seemed complex, its neighbor in Maryland had its own complicated legislation to work through. The Maryland Lottery and Gaming Control Agency (MLGCA) had plenty of experience with gaming regulation; since 2010, it has regulated Maryland’s six casinos. Still, sports betting was a whole new ball game when it was legalized in 2021.


The legislation designated 17 locations that would be eligible for a retail sports betting license. Beyond that, it also created SWARC, the Sports Wagering Application Review Commission, to oversee a competitive bidding process for additional retail licenses (up to 30) and for all the mobile licenses (up to 60). The Maryland General Assembly's goal in providing those large numbers was to create a diverse marketplace where Maryland-based minority- and women-owned businesses wouldn’t necessarily be shut out as the big national operators came in.


The 17 locations were not named specifically in the legislation, but were described enough in business parameters that they were clearly identifiable. For example, they included the existing casinos, major-league sports teams and off-track betting facilities. The 17 designated entities were basically “pre-approved” as long as they passed the MLGCA's background investigations.


For the other licenses, SWARC had a 45-day application window that opened in early September 2022 and generated 21 mobile applications and six retail applications. The MLGCA was kept busy with background investigations of the owners and the businesses themselves, to determine whether they had the necessary integrity and financial stability to be licensed. There are now 13 retail operators up and running, including five casinos, plus 11 mobile operators.


The MLGCA still has pending investigations of other businesses that applied during that application window. The agency's staff also oversees sportsbook compliance, revenue auditing, reviews of advertising and promotional materials, and maintains an approved wagers catalog, making determinations about whether to add new events or wager types when operators request them.


Each sportsbook pays 15% of its taxable win to the Blueprint For Maryland’s Future Fund, which supports public education programs.




Another state that was grandfathered in for sports betting during the PASPA years, Montana still entered a new era when the Montana Lottery launched Sports Bet Montana in March 2020. Operationally, it’s just another product in the Lottery’s game lineup, although one that requires more attention on a regular basis. “We are the regulator and the operator, we provide everything from game parameters to all of the assets, and we work with our vendor on the betting lines,” explains Director of Marketing and Sales Anne Charpentier. “We’re basically involved in all the aspects of sports betting here in Montana.”


With lottery games, once rules and parameters are approved, they rarely change. That’s not the case with sports betting, where changes – beyond just changes in the sports themselves – are nearly constant. “We have to be constantly aware of what is happening, how we have to protect the book, how we protect the state, and how we protect the player.”

There are currently about 520 retail locations that offer sports betting; many of them were not existing lottery retailers but already had a gambling license from the Gambling Control Division of the Department of Justice. That license is required by law to offer sports betting as a way to ensure the venues are age-appropriate and properly regulated. Many existing lottery retailers pursued a gambling license so they could offer the product.


To place a sports wager, players must be within the physical confines of the licensed retail location, although they can manage all other aspects of their play online or through the Sports Bet Montana app at any time. Still, only about 10% of actual wagers come through the app; the vast majority of play is through the onsite kiosks.


Such a new and different product has been a challenge for the very small Montana Lottery, where everyone had to take on extra work. Yet there’s also an energy that comes with it. And as more is learned about the players and what drives engagement, the sky’s the limit.


New Hampshire

New Hampshire’s authorizing legislation for sports betting required the New Hampshire Lottery to conduct a public bid process in order to select mobile and retail sports betting operators. A request for proposals resulted in 13 bids, which were evaluated across a broad spectrum of areas to ensure the winner(s) provided the most benefit to the state as a whole. At the end of the process, DraftKings was chosen as the sole operator for both mobile and retail sports betting.


DraftKings is responsible for all aspects of wagering including anti-money laundering and know your customer policies, geo-fencing, responsible gaming, market creation, player wallets, equipment, bet settlement, etc. The company conducts sports betting in New Hampshire via its mobile app as well as retail sports wagering at Lottery-approved facilities in the state (there are currently four such locations).

Per certain statutory and contractual provisions, the New Hampshire Lottery acts partly as an operator and partly as a regulator, with emphasis on the latter. Operationally, for example, the Lottery must approve events and wager types prior to offering, has the ability to cap maximum wagers, and approves locations for retail sports betting.


As a regulator, the Lottery ensures that DraftKings is honoring the terms of the contract, is in compliance with federal and state laws, and settles player disputes that cannot be resolved directly. The Lottery reviews and approves such things as mobile and retail financial results; internal controls, house rules, and the responsible gaming program; and core changes to software and equipment utilized for wagering.


North Carolina

Legislation authorizing sports betting and horse racing in North Carolina was signed into law on June 14, 2023. The North Carolina State Lottery Commission was established as the licensing and regulatory body for both activities. That set into motion a whirlwind of activity over the ensuing months, as Lottery staff and a new regulatory division developed rules and regulations, licensing programs, responsible gambling initiatives, monitoring and enforcement procedures, and so much more.

In just nine months, the team successfully created robust governance and business processes and systems to create a legal sports wagering market in North Carolina. The system went live with eight online/mobile operators on March 11, three months ahead of the June 15 target date set by the General Assembly.

There is an 18% tax on gross gaming revenue. Of the tax collected annually, the first $2 million is distributed to the Department of Health and Human Services for gambling addiction education and treatment programs. After that, proceeds benefit various youth and collegiate sports programs, a new North Carolina Major Events, Games, and Attractions Fund to encourage job creation and investment in the state, and the state’s General Fund.



The Ohio Lottery plays a small role in a sports betting market dominated by online/mobile platforms (Type A licenses) and casinos and other major venues (Type B licenses). The Casino Control Commission regulates those licensees, while the Lottery is the effective regulator of Type C (“host”) licenses, which must be active lottery retailers with an eligible liquor license. If a location wants a Type C license, the Lottery reviews that location and if eligible, sends a recommendation to both the host and the Casino Control Commission; the host then must apply to the Commission for a Type C license. That Commission also approves sporting events and wager types for all licensees.


The Ohio Lottery manages sports betting through approved proprietors, which actually run the sports books for the host locations. Currently there are three such proprietors – Sports Bet Ohio (headed by Intralot, the Lottery’s traditional lottery vendor partner, so these locations use the Lottery’s existing equipment), UBET Ohio and BetSkybox. The latter two companies provide their own equipment and set up their own infrastructure.


As a regulator, Ohio Lottery primarily ensures compliance on a number of fronts from both the proprietors and the hosts. At the end of March, there were about 830 host locations.



Oregon was another state allowed to do sports betting prior to the PASPA repeal, since the Oregon Lottery had launched Sports Action in 1989; that game continued until 2007. Twelve years later came the debut of Scoreboard. While Sports Action was more of a traditional lottery retail product with the twist of being based on actual football games, Scoreboard was online-only sports betting rivaling any of the post-PASPA launches across the country.


By state law, only the Oregon Lottery or the tribal casinos can offer any type of legal gambling, so the Lottery owned and operated Scoreboard with technology provider SBTech providing the platform. Then in 2021, DraftKings acquired SBTech, and the Lottery rebranded Scoreboard in January 2022 as DraftKings Sportsbook.


As always, the Lottery is both the operator and regulator for all sports betting in Oregon (outside of the tribal casinos). While DraftKings is a great partner, the Lottery remains very much hands-on, working closely with the company on everything from wager selections to customer service and responsible gambling. “We still need to do our due diligence as stewards of Oregon funds, to make sure what we are offering is appropriate and within reason for our Oregon Lottery customers,” explains Kerry Hemphill, the Lottery’s Manager, Sports Betting Product.


Sports betting continues to be offered only online or though the mobile app; a retail option is legal but not currently in the Oregon Lottery roadmap.


Rhode Island

The Rhode Island Lottery is empowered with operational and regulatory oversight and control over all aspects of sports wagering operations in the state. Retail sports wagering operations are restricted to the physical confines of Rhode Island’s two casinos, while online and mobile sports wagering is currently offered through a Lottery-operated system.


IGT is the Lottery’s Sports Wagering Service Provider, with an exclusive contract to provide the equipment, technology, services and/or products related to sports wagering; trading and risk management is subcontracted to William Hill/Caesars.


The Lottery’s operational and regulatory oversight and control includes, but is not limited to, the following:

  • Establish and maintain the documents related to sports wagering such as rules and regulations, house rules, terms and conditions, account wagering rules, privacy policy, and promotion rules.

  • Establish and maintain the list of events and/or markets that can be wagered on in Rhode Island.

  • Monitor and audit all the financial activity related to sports wagering.

  • Assist in developing the marketing and promotion plan for sports wagering and provide final approval on the plan and spend.

  • Participate in regular calls and meetings with the service providers to discuss sports wagering as well as improvements to the product (UI, UX, etc).

  • Act as the final arbiter for player complaints and/or issues related to sports wagering that are not resolved by the casino and/or player support.



Beginning July 1, 2020, the Virginia Lottery assumed regulatory oversight of sports wagering in the Commonwealth. There are currently 15 active sportsbooks in Virginia, three at casinos and 12 that are online/mobile only; there can be up to 19 operators.


As a regulator, the Virginia Lottery’s primary responsibilities include:

  • Conducting comprehensive background investigations on all sportsbook operators, suppliers and vendors.

  • Reviewing operators’ house rules, terms and conditions, and internal controls to ensure compliance with regulations; other compliance efforts include testing operator apps and performing audits.

  • Administering a voluntary exclusion program. 

  • Reviewing wagering activity to ensure sportsbook operators are not offering wagers that are prohibited in Virginia.


Given changes in the industry (consolidation led to the sale or surrender of three Virginia permitholder licenses in the past year), the Virginia Lottery is also responsible for working with sportsbook operators to ensure a smooth closing process that includes the settling of wagers and the return of any patron funds remaining in wallets at the time of closure.


There is a 15% tax on sports betting adjusted gross revenue; 97.5% of that goes to the state’s General Fund and 2.5% to the Problem Gambling Treatment and Support Fund.


Noteworthy highlights of the Virginia sports betting law:

  • Wagering on Virginia college teams is prohibited, as are prop wagers on any college team.

  • Virginia requires all sportsbook operators to adhere to our Sports Bettors’ Bill of Rights.

  • Sportsbook operators are prohibited from using “Virginia is for Bettors” as a slogan.


West Virginia

Sports betting in West Virginia began when Hollywood Casino at Charles Town Races opened its onsite sports book on August 30, 2018. It was quickly followed in the market by The Greenbrier, a luxury resort. By the end of that year, all five of the state’s casinos had launched sports betting, although technology issues interrupted play at two of them for a few weeks.


The West Virginia Lottery serves primarily as a regulator for the five casinos; each casino contracts for its own sports betting operation. Casinos can have an onsite sports book and up to three different online/mobile apps.


The Lottery’s responsibilities include licensing, testing and approvals of management service providers (any sports betting company that wants to do business with the casinos), based on state rules and regulations. All operational and transactional issues are handled internally by those providers. The Lottery also serves as a midpoint to assist consumers, should there be inquiries or complaints that are not first resolved by the providers.


There is a privilege tax of 10% on all sports betting gross gaming revenue.


American Sports Betting

Lotteries as Operator or Regulator

Download PDF • 72KB



2023 Handle

2023 GGR



June 2018



Facility + online/mobile

West Virginia

Aug 2018



Facility + online/mobile

Rhode Island

Sept 2019



Facility + online/mobile


Oct 2019




New Hampshire

Dec 2019



Facility + online/mobile


March 2020





May 2020



Facility + online/mobile


Jan 2021



Facility + online/mobile


Oct 2021



Facility + online/mobile


Dec 2021



Facility + online/mobile


Sept 2022



Facility + online/mobile


Jan 2023





Jan 2024


North Carolina

March 2024


Handle and gross gaming revenue (GGR), in millions, for the 2023 calendar year are based on unaudited monthly or weekly data; will not reflect later adjustments.

"Facility" is any location with onsite wagering primarily through kiosks or terminals; most often these are casinos.

* In Vermont, sports wagering is under the Vermont Department of Liquor and Lottery, sharing some common staff.

More to the Story

With legal sports betting now in 34 American jurisdictions after two more lotteries went live earlier this year, lotteries may be in the minority as operators and/or regulators, but their influence is widely felt.

For example, when Tennessee decided to implement online/mobile sports betting, the startup task was given to the Tennessee Education Lottery to ensure the utmost in integrity and player protection. Once established in November 2020, ongoing regulation was transferred at the end of 2021 to the newly-created Tennessee Sports Wagering Council.


Then there’s the Vermont Department of Liquor and Lottery, which serves as the regulator for online/mobile sports betting, which launched in January. The restructuring of the Department occurred over the past couple of years, and while there is a dedicated sports betting director, there is crossover between various staff functions so sports betting regulatory functions will touch staff members across both liquor and lottery.


Finally, as noted above, the Connecticut and Ohio lotteries were given a piece of a much larger sports betting market dominated by casinos and their online partners. The same could be said for Louisiana, where the legislation authorizing casino and online sports betting included a niche for sports betting at bars and restaurants in the Louisiana Lottery’s retail network. However, a vendor partner could not be found, and the Lottery is no longer pursuing a sports betting initiative.


For a review of the handle and revenue numbers being generated by sports betting across the country, be sure to visit this month’s companion piece in Research Corner.

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