One of the strongest arguments for using revenue from legalized sports betting to finance youth sports is that the proceeds are expected to be such a pittance, they're not going to have so much of an impact anywhere else.

Following the U.S. Supreme Court's May 2018 ruling that allows sports gambling can be legalized nationwide, organizations such as the Aspen Institute and the Sports & Fitness Industry Association have seized on using tax revenue generated by betting on pro and college sports as a funding mechanism for youth sports, which is occurring in countries such as Norway and China.

The idea is that the revenue can help give opportunities for low-income and community programs that are left dying on the vine because of the relentless privatization and professionalism of the American youth sports system, which at this point is a $15 billion business that exists more and more as a tourism generator than it does as an athlete developer.

Tom Cove, CEO of the Sports & Fitness Industry Association -- whose member companies and organizations, of course, stand to benefit financially if more kids participate in sports, but I think we can agree more participation is inherently a good thing -- stated his case at an Aspen event in Washington in September 2018:

“We have a public policy imperative and there’s a public policy solution here, and there are many historical and particularly current analogies that suggest that we could take resources from this need,” Cove said. “There is a logical and moral relationship between sports betting and youth sports.”

Aspen cites not only the Norway and China examples, but also that many states designate their lottery or gambling proceeds for specific budget lines or extra funds.

Since the Supreme Court ruling, six states have legal betting on pro and/or college sports (not for high school or youth sports games, though it happens -- there is even a sports book based outside the United States that takes action on some American high school football games). So far, West Virginia, Delaware, New Jersey, Nevada, Mississippi and New Mexico have not designated funding for youth sports. States are hoping to use proceeds to fill holes elsewhere; in Mississippi, literal holes in the roads, and West Virginia, budget holes in its pension funds.

However, there is strong evidence that sports gambling is going to bring in, at best, a pittance, and that's true whether you're West Virginia, which collects a mere 10 percent tax on whatever is bet, or Delaware, which collects a 50 percent tax (plus another 10 percent that goes to horse tracks). Here is what the state of West Virginia expects to collect from sports gambling:

State officials believe sports betting will bring in about $5 million in the first year of implementation, about $13.4 million by the third year and about $28.7 million by the fifth year as betting becomes established.
That's it? Yup, that's it. I don't know that anyone expected this to be a budget cure-all, but at best that's 0.6 percent of the current West Virginia general budget of $4.38 billion. Even Nevada, which counts $250 million in sports betting in 2017, collected only $17 million in tax revenue from it. (Granted, it has only a 6.25 percent tax rate.)

Part of the issue is that sports betting -- despite all you hear about the underground wagering that goes on -- isn't a terribly popular form of gambling. To put those numbers into some perspective, my home state of Illinois allows slot machines seemingly just about everywhere these days, and in 2017 the state collected $42 million in revenue from them -- more than double Nevada's sports betting revenue -- just from the south Chicago suburbs. The localities also received $7 million in revenue; my town, Oak Lawn, population 55,000, alone received $860,000 of that. Slots, unlike sports gambling, demand no knowledge whatsoever, except for how to get money into the machine.

But the other issue is that gambling barely makes a budgetary dent in the best of circumstances. A big sell for the spread of state lotteries nationwide is that they would help with education funding. But at best lottery revenues fund 10 percent of a state's education budget -- and that assumes general fund money wasn't cut from education in anticipation of lottery revenues, which essentially meant education wasn't getting any more than it would if legal gambling never existed.

Various tax experts of various political persuasions have the same message for legislators who count on sports gambling as a reliable, sizable revenue source: you're kidding yourselves. From The Associated Press:

Lucy Dadayan, a senior research associate at the Urban Institute, a progressive think tank in Washington, D.C., said Mississippi and other states should be leery of counting on a huge windfall.

“Counting on revenues from lottery proceeds to fund infrastructure is immature and not a sound policy decision,” she said. “A more prudent policy option would be dedicating funding from diverse revenue streams for spending on infrastructure and other programs.”
Sports gambling revenue certainly wouldn't be enough to bridge the gap between rich and poor in youth sports, but $5 million out of the state budget could make some impact. It could be used to cover pay-to-play costs in school sports, or for facilities improvements, or to underwrite parks and recreation departments so they could offer more programs or reduce the fees for them. The money is a small percentage of what is needed and necessary, but it certainly is going to go a lot further than $5 million spent on roads.

This article is a reprint from Forbes.com.  To view the original story and comment, click here.