Early reports show a strong handle in Buckeye State & Colorado, with strong efforts in Minnesota. Here is this week’s sports betting industry news roundup.
Key Points
– Several states have made industry news this week with big betting numbers.
– A few states are still trying to get legislation passed to legalize sports betting.
As usual, the sports betting industry was active this week. A newcomer to legal betting made the biggest splash with a huge statement to kick off a strong 2023. Here’s a look at this week’s sports betting industry news.
Strong Handle in Buckeye State – 1st Monthly Betting Report
The Buckeye State entered the sports betting industry in a big way as the 16 online sportsbooks in the state combined to accrue a total of $1.090 billion. While the brick-and-mortar locations brought in an additional $23 million. This shows a strong handle in Buckeye State.
The universal launch was highly anticipated because the state is the seventh-most populous in the nation. Unlike some prominent markets across the country, Ohio has an operator-friendly tax rate of 10 percent.
As soon as the calendar flipped to the new year, many competitors offered free bets to bettors to sign up on their respective platforms. Bookmakers totaled $320 million in free bets, according to the numbers. Regardless of the situation, the public didn’t fare well against the house in the first betting report.
The hold rate registered by bookmakers in Ohio was 18.8 percent, which is more than 2.5 times the national average of 7.2 percent. New York had the previous record revenue haul, but Ohio had approximately $60 million more. The Empire State brought in $149.9 million in the same month versus Ohio’s $208.9 million.
Due to the low tax rate in Ohio, the state collected just $20.9 million in tax receipts. Gov. Mike DeWine has discussed increasing the tax rate to 20 percent. An amendment to change the tax rate would take time. Howver, this strong handle in Buckeye State provides optimism.
Sports Betting Industry News in Colorado
The Colorado Department of Revenue reported a total handle of $547.2 million in January. Despite being the 22nd-most populous state in the country, the Centennial State continues to make waves throughout the industry.
Bettors in Colorado have a number of platforms to choose from because the state has a low barrier to entry for bookmakers. In the post-PASPA era, Colorado is one of the seven states to surpass the $10 billion total handle benchmark since sports betting became legal.
With California not in the picture, Arizona, Colorado, and Nevada have become the Big 3 in the West. For the fourth consecutive month, bookmakers in Colorado accumulated a handle that exceeded $500 million.
The handle was up 5.6 percent from December’s $518.1 million, but down 4.6 percent from January 2022’s record $573 million. Despite bringing in a solid handle, the public brought down the average win rate to start the new year.
Strong Handle Surpasses $200M
Sportsbooks combined to post a hold of 6.5 percent, which was the lowest since June (2.2 percent). The gross revenue for the month was set at $35.5 million. Since the state allows the operators to use promotional deductions, the state was able to levy $22.5 million in adjusted revenue.
Comparing the year-over-year numbers, the adjusted revenue in January 2023 was approximately double but was 13 percent lower than what was finalized in December. For the month, the state collected $2.6 million in tax receipts.
Thanks to Colorado’s strong handle, the national handle in the post-PASPA era surpassed the $200 billion benchmark. The month of March signifies Problem Gambling Awareness Month, and the Colorado Limited Gaming Control Commission became the first commission to approve $1.57 million to combat problem gambling. Colorado’s strong numbers, plus the strong handle in Buckeye State gives rave reviews for other states looking to legalize sports betting.
Minnesota Inches One Step Closer to Legalized Sports Betting
Rep. Zack Stephenson led Minnesota’s effort to legalize sports betting for the second consecutive year. This time, both the Senate and House chambers have a Democratic majority, which will likely make all the difference.
The professional sports franchises in the Gopher State have partnered up to push for legalized sports wagering in the state. A direct license will be granted to the tribes in Minnesota this year, allowing them to collaborate with commercial entities like DraftKings and FanDuel to provide sports betting services.
In addition, Rep. Zack Stephenson has repeatedly stated that sports betting is already prevalent throughout the state because not only do neighboring states offer sports betting, but bettors continue to use offshore sportsbooks to place bets throughout the year.
Simply put, the lawmaker wants the operation to be controlled. The state could generate revenue that funds programs such as youth sports in high-risk areas, problem gambling, and others.
Furthermore, the adjusted revenue tax rate in Minnesota is set at a business-friendly rate of 10 percent. Approximately $1.2 billion in revenue could be generated by the jurisdiction each year, based on Representative Stephenson’s “conservative estimate” from last year. Based on the estimates, the state could potentially collect $12 million in tax revenue every year.
Industry News – Fanatics Sportsbook’s Beta Version in Tennessee
Fanatics is on a mission to be an innovative competitor in the sports betting industry. The company will not be launching on time in Massachusetts, but the company received an approved license in Tennessee.
Tennessee users were the first to try out the beta version of the mobile sports betting platform on Thursday. The app may not be available to the public just yet, but this is another monumental step in the right direction since setting up a shop at FedEx Field in Washington, D.C.
The company is also licensed in Ohio, but experts aren’t sure when the full version will launch in the state. The sports betting market is still wide open in California, and Fanatics will need to gain market access in at least 10 states to operate in the Golden State as bookmakers will continue to push Proposition 27 in 2024.
With all this news, including a strong handle in Buckeye State, all things point to positivity growing in the industry.
