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When any newly legalized sports betting state of notable size joins the national picture, there is considerable interest in its level of activity, and Ohio impressed on a massive scale with its January debut.
The Buckeye State (seventh largest in the U.S.) joined New York, New Jersey, and Illinois as states with billion-dollar sportsbook handles, surpassing the volume of wagering in the nation’s gambling capital of Nevada. The $1.11 billion wagered by Ohio’s sports enthusiasts in January was $342 million more than their peers in the neighboring, bigger state of Pennsylvania.
Now that spring has arrived and there are three additional months of statewide sportsbook handle in the mix, it’s clear just how much of an outlier that first month was — driven by the $320 million in sportsbook promotional giveaways in Ohio and less tangible factors such as pent-up demand and heavy media advertising by online operators promoting the new product.
Based on more normalized betting activity in February, March, and April — with promotional giveaways steadily diminishing to the point of just $24.2 million in the last month of reporting by the Ohio Casino Control Commission — Ohio won’t be a New York-New Jersey-Illinois-Nevada type of state. Its April volume of $521 million was its lowest yet.
It appears Ohio’s level of future handle will be similar to or a little behind Pennsylvania’s and somewhat larger than Michigan’s, which all makes sense given factors such as population and the number of local pro and college teams in each state that may help motivate bettors.
It stands to put Ohio in the range of $7 billion to $8 billion in combined annual online and in-person wagering on sports. That may be only half the amount of what’s wagered in New York and three-fourths the level of New Jersey and Illinois, though it’s not to suggest there’s anything shabby or disappointing about it.
February-April provides better context
The new, clearer impression of Ohio’s future in this realm comes from analyzing the $1.9 billion in total bets taken there in February-April compared to the $1.11 billion in January alone.
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In all states, the shorter, post-football (except Super Bowl) month of February generates less betting than January, and then there’s another rise in March by virtue of the NCAA Tournament, followed by another dip in April.
Whereas Ohio was far ahead of Pennsylvania in January handle, both states did about $1.9 billion of it in February-April. That compares to $4.8 billion in New York, $2.7 billion in New Jersey, and $2.1 billion in Nevada. Illinois has not reported April data yet, but based on prior months, its volume will be similar to or slightly ahead of New Jersey’s.
While a full year’s data would be even better from which to extrapolate, all of the recent numbers suggest that Ohio will be pitted alongside Pennsylvania in competition for the state with the nation’s fifth-biggest handle.
For the first time since Ohio debuted, Pennsylvania had larger handle than it in April — $572.2 million to $521.6 million. Pennsylvania has a modestly larger population, 13 million to 11.8 million. Both states have multiple metropolitan areas with rabid followings for their professional sports teams and have major Big Ten universities with statewide fan bases — particularly for football.
Ohio has more online sportsbooks — 18 to 13 — although each additional sportsbook beyond the top three of FanDuel, DraftKings, and BetMGM carries less significance in terms of what it adds. Overall, Ohio has been generating about 97% of its handle by online means compared to 93% in Pennsylvania. Unlike Pennsylvania and other states, Ohio has been able to include about $1 million in handle each month from its unique law allowing sports betting kiosks in bars and other small outlets.
If the two states are indeed very similar in so many respects, those interested in Ohio’s betting should keep in mind that Pennsylvania’s total in 2022 added up to $7.25 billion. Nothing so far this year suggests the Keystone State will be much above that, if at all, in 2023.
Considering it had such an inflated debut month, Ohio would seem likely to get between that figure and $8 billion once 2023 is in the books.
What all of that adds up to in revenue is less predictable, as it depends on how bettors fare with their picks, but Ohio’s sportsbooks in four months have combined for about $450 million in gross revenue, with $45 million of that going to the state under its 10% tax.
That is, again, a pace they won’t keep up, as the books’ $209.2 million in January revenue was a national record the state is highly unlikely to ever match. The revenue average in the three succeeding months has been $80 million.
Based on their experience in other states, that is nonetheless a number the operators should be plenty happy with if they achieve it on an ongoing basis, although a decrease is also likely in the slower months ahead before the football season returns.
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