bet365 Continues To Make In-Roads In Virginia

In the five years sports wagering has been available on a state-by-state basis in the United States, it has settled into a stratification of sorts.

FanDuel and DraftKings make up the top tier, though it can be argued FanDuel has carved out its own spot above DraftKings based on its relentless ability to generate revenue and as the first to profitability. The second tier almost always involves BetMGM and Caesars Sportsbook, with the former consistently showing a willingness to provide promotional outlay on a level that makes being the No. 3 mobile sportsbook in the country a viable if not unstated goal.

After those four, however, it’s a scramble not only for that remaining market share but also survival. In Virginia, bet365 is going all-in to secure its place at the top of this third tier competing with the likes of BetRivers, PointsBet, and Barstool Sportsbook, according to figures for the month of March obtained by Sports Handle from the Virginia Lottery via a Freedom of Information Act request.

A return on investment in the mid-South

Your Top 10 February #SportsBetting handles by state: pic.twitter.com/5RqyWTgyp3

— Chris Altruda (@AlTruda73) May 11, 2023

Bet365 is currently live in only four states — Virginia, Ohio, Colorado, and New Jersey. Complete handle and revenue figures are only available in Virginia and Ohio, but monthly reports in the Old Dominion show the England-based sportsbook’s aggressive commitment to the chase.

Since launching in late January, bet365 has offered nearly $11.3 million in promotional offers it was able to deduct for tax purposes in Virginia. In its first full month of action in February, the outlay of nearly $7.5 million was 47.9% of its $15.6 million handle and 41.3% above its gross revenue of close to $5.3 million.

A 33.9% hold is obviously unsustainable, but bet365 still showed progress in March. Promotional spend declined by more than half to $3.4 million, while handle surged 66% to $25.9 million. Its spend — which was 13.2% of handle — still outpaced revenue, as the sportsbook had a more typical month with an 8.6% win rate that resulted in more than $2.2 million in gross revenue.

Since operators in Virginia are allowed to deduct promotional spend for their first 12 months and carry over negative adjusted gross revenue in perpetuity, bet365 is racing against the clock to make itself a top five handle generator in hopes it will provide the potential for revenue needed for profitability. It was a strong fifth in the Old Dominion in March, less than $8 million behind Caesars and with nearly double Barstool’s handle.

The company’s challenges are two-fold: Maintain that top five position and reach positive AGR. Since launch, bet365 has grossed $7.6 million in revenue but has a negative AGR of nearly $5 million. According to figures compiled by Sports Handle from previous FOIA requests, bet365 has the highest negative AGR total for any mobile operator spanning the periods from January-May 2021 and October 2021 to the present.

Caesars had the previous peak negative AGR of $4.7 million in February 2022, a figure it gradually erased by last September. It was helped along with the budget amendment that took effect in July which limits operator deductions to the first 12 months of operations.

Virginia could be a state where bet365 can thrive. The Old Dominion has consistently been in the top 10 nationally for handle, and it is a marketplace where operators are getting the better of bettors in line with the national trends over the past nine-plus months. The overall statewide hold has been 9.1% or higher each of the last nine months, with March’s landing at 10.8% — the fifth time in that span it reached double figures.

FanDuel, DraftKings make potent 1-2 punch

March #SportsBetting numbers 🧵for #Virginia via @VirginiaLottery. Rankings out of 27 months in parentheses.

Handle: $511,614,541 (4)
GGR: $55,258,910 (2)
GGR Win Rate: 10.80% (7)
AGR: $47,651,362 (3)
AGR WR: 9.31% (5)
Taxes: $7,413,213

1/x #GamblingTwitter

— Chris Altruda (@AlTruda73) May 2, 2023

Of course, one cannot talk about higher win rates in the sports wagering space without making mention of FanDuel. The online juggernaut continued its roll in March with more than $26.9 million in gross revenue, fashioning a 12.9% hold on $209.1 million handle. It was the ninth consecutive month FanDuel posted a double-digit hold and the seventh straight month gross revenue cleared $20 million.

Its first quarter of 2023 in the Old Dominion was simply impressive: a 12.5% win rate on $610.4 million in accepted wagers to claim close to $76.4 million in gross revenue. That puts it on pace for more than $300 million in revenue this year, which would be 26.7% above last year’s haul of $241.2 million.

DraftKings also acquitted itself well thanks to the NCAA Tournament — its revenue landed just shy of $13 million to mark its second-best month in the state behind the $14.5 million claimed last September. It posted a record monthly handle of over $133.5 million for a 9.7% hold, also its best since a 13.5% mark last September.

BetMGM claimed the final podium spots for handle and revenue with a strong bounce-back in March for the latter. The $7.1 million in gross revenue was up 76.9% from February, as it recorded its first double-digit hold — 10.7% — since last November. Caesars also shook off a sluggish February with revenue up 88.8% to nearly $2.6 million on a win rate that clicked 2.4 percentage points higher to 7.6%.

Barstool, the only other operator with an eight-figure handle at $13.4 million, also joined BetMGM and Caesars on the rebound. Its $925,913 in gross revenue was a more than three-fold increase from February, as its hold spiked more than 5.3 percentage points to 6.9%.

On the opposite end of the spectrum is Bally Bet, and the company’s platform changeover to Kambi cannot come fast enough. The smallest book by handle, Bally Bet endured its sixth consecutive losing month as bettors came out $79 to the good on $5,600 handle. Amazingly, Bally’s has a -102.5% win rate for the calendar year, as it has paid out $11,513 on top of the $11,231 in accepted wagers.