CLEVELAND, Ohio — With more than $1 billion worth of bets placed in just a month, the first look at Ohio’s new sports gambling market made a lot of eyebrows perk up.
But what does does that big number, and others released so far, actually tell us about the future of sports betting?
“Ohio looks like it will be productive, competitive market,” said Chris Grove, Partner Emeritus for Eilers & Krejcik Gaming, a leading research firm in the gambling industry. “And I don’t think that will be a surprise for anyone.”
All those bets translated into about $200 million in taxable revenue for the betting companies, or about $21 million in taxes to the state. The vast majority of bets went to mobile betting apps, like FanDuel or DraftKings.
It will take Ohio’s sports betting market a few years before it grows into maturity. Eilers & Krejcik predicts that Ohio will bring in about taxable $845 million in revenue each year but hitting that mark could be years away.
Grove said it’s too early to start comparing Ohio to other states. Analysts will need at least a year of data before they can really dig in.
But even with one month of numbers, there’s a lot to digest. There’s also still lots of things we don’t know about Ohio’s betting habits.
Here are six things we know and don’t know so far:
No. 1 - Ohio is No. 2, but...
Ohio’s $1.1 billion in bets in January was second only to New York, where just under $1.8 billion of bets were placed.
New Jersey ($1.08 billion), Nevada ($934 million) and Pennsylvania ($772 million) rounded out the top five, according to released reports.
But while Ohio just legalized betting and had pent up demand and tons of betting credits, these other states already had legal gambling. It’s not a fair comparison, Grove said. All of the “Bet $5, get $200″ deals in Ohio inflated the state’s numbers.
“They are not apples to apples; they’re more like an Apple iPad to a red delicious,” Grove said of comparing Ohio to other states at this point.
Even clean comparisons to opening months are hard to come by.
Arizona, with 7.3 million people versus Ohio’s 11.8 million, reported $291 million worth of bets in September 2021 — the first month of legal sports gambling. But Arizona had only eight betting apps and two retail sports books at the time. Ohio opened with 16 apps, 14 sportsbooks and three companies running kiosks in bars and other places.
When New York’s mobile sports betting launched in January of 2022, $1.7 billion worth of bets were placed. But the state has close to 20 million people. And sports betting wasn’t entirely new to New York at that point. There was in-person sports betting ahead of the mobile launch.
No. 2 - The gamblers beat the house
Because of all the promotions from apps like DraftKings or FanDuel, Ohio’s gamblers made money as a collective in January.
Just under $1.1 billion was bet on mobile apps, but $320 million worth of those bets were made using promotional credits given out by mobile sportsbooks. Deals like the “Bet $5, get $200″ meant Ohioans had lots of betting credits to play with. The house ended up on the losing side in January.
Ohio’s bettors put $770 million of real cash on the line. And mobile sportsbooks paid out $854 million in winnings.
It makes sense for these companies to spend lots of money initially on what’s essentially advertising, Grove said. Ohio will have more promotions than normal for about a year, and even then they won’t go away entirely, he said.
“Even in a mature market, a typical online sportsbook will spend 40 to 50 cents of every dollar in revenue it makes on customer acquisition and retention,” Grove said.
No. 3 - We don’t know (for sure) what Ohioans are betting on
Did the Bengals’ playoff run and/or Ohio’s love of football help boost gambling in the state? We don’t know. There are no published figures from regulators about how Ohioans bet, nor is this information reported to state regulators.
DraftKings responded to questions from cleveland.com by saying it doesn’t share those numbers for competitive reasons.
Grove said the NFL and NBA both attract a lot of betting volume, and betting revenue tends to follow their seasons.
October through March, with the NFL season, the Super Bowl, March Madness, the end of Major League Baseball and a good chunk of the NBA tend to be strong for bets. April through September tend to be less busy, despite daily baseball games.
Illinois, where sports launched in March 2020, does require sportsbooks to share data about how people bet. If you assume Chicagoans and Clevelanders like similar sports, it’s a good comparison.
Since sports betting started in Illinois, 24.6% has been placed on basketball, 19.2% on football and 11.8% on baseball. Some bets involve multiple sports. Pro sports accounted for 84.2% of the wagering.
Ohio bettors can wager now at FanDuel in Ohio and other sportsbooks in the state, including Barstool Sportsbook, Caesars and DraftKings.
No. 4 - The impact of the canceled Bills-Bengals game
When Buffalo safety Damar Hamlin suffered a cardiac arrest on Jan. 2, the game between the Bills and Bengals was stopped and never finished.
By that point of the game, some bets were decided. Tyler Boyd scored a touchdown in the first quarter; so bets on him doing so stood. But bets on who won the game were voided.
Ohio had $21 million in voided bets during January. What we don’t know is precisely how much of that was tied to the Bills-Bengals game, and how much may have been for other reasons.
Jessica Franks, spokesperson for Ohio Casino Control Commission, said every sportsbook is required to have a policy about voided bets. But there is no requirement to report which bets were voided, nor details for any one contest.
No. 5 - Payouts varied by who was taking the bet
The bets gamblers make and the way athletes play determine the actual payouts. But some sportsbooks kept more cash than others.
This is usually called the “hold rate.” The amount of money the sportsbooks take on both sides of the game.
A vig or vigorish — a fee companies charge for accepting the gambler’s wager — is baked into the odds.
Combined, sportsbooks held onto about 19% of the money (or free credits) that was bet. But it varied widely, depending on the sportsbook or app company.
The BetRivers app held onto 5% of the amount bet. The BetMGM app held onto 26%.
Ohio’s 16 mobile betting apps, which accounted for almost all the bets placed, held onto 19%. But the physical sportsbooks like those at the JACK Cleveland Casino or MGM Northfield Park held onto 14.2%.
While not an apples-to-apples comparison, slot machines at Ohio’s four casinos and seven racinos held onto about 10% of the money put into them in 2022. Table games held onto about 25%.
No. 6 - How much money actually was risked by the gamblers?
Sports betting numbers don’t accurately reflect the amount of real money put into the apps, because they don’t track deposits. The $1.1 billion number accounts for all bets placed throughout the month and includes money that was used to bet twice (money won back and then bet again), as well as promotional bets.
Let’s say a gambler bets $100 on a game and wins $100. Then they bet $200 on another game. That counts as $300 of bets, even though the gambler only deposited $100 at the start.
Ohio’s slot machines, in comparison, track the amount of cash put in and the amount of cash paid out for any one session.
While $770 million of real cash ($1.1 billion minus all the promotional bets) was wagered, Ohioans deposited less money than that. We don’t know how much less.