State Winners & Losers of Legal Sports Betting in Last Year
Indiana has hit two milestones recently in its sports wagering history.
For one, Hoosier State sports betting celebrated its one-year anniversary on Sept. 1.
However, even more important, the state reached $1 billion in total handle during July after about 10 months of operation.
With both retail and online sportsbooks, Indiana has enjoyed a fairly smooth early run in sports wagering even though gaming operators had to cope with the unexpected challenge of the COVID-19 pandemic and the shutdown of the sports world.
The state tax rate on sports wagering is 9.5%, which is certainly palatable to operators. DraftKings and FanDuel respectively dominate the Indiana online sports gambling market with BetRivers in third place.
So with Indiana looking to continue its momentum, assuming the sports world stays on course, we take a look at some jurisdictions that have come along since Indiana debuted — by either launching or approving-but-yet-to-launch sports wagering. It’s an uneven landscape to say the least.
Colorado came out of the starting blocks at full sprint when sports wagering went live on May 1. Despite the challenges of the COVID-19 pandemic, online operators in Colorado have launched 10 sports wagering websites to go along with eight retail sports books. Seemingly, everyone has shown up for the party in the Centennial State, including DraftKings, FanDuel, BetRivers and BetMGM, among others. And waiting in the wings are PointsBet USA and Penn National/Barstool.
Colorado online and retail sports wagering started in May with $25.5 million in handle despite the fact that Ukrainian ping-pong was among the pandemic sports highlights at that point. Since then, handle grew to $38.1 million in June and $59.2 million in July. With MLB, NBA and NHL ramping up play through the summer, the August handle numbers are guaranteed to jump enormously.
One key to Colorado’s robust performance has been remote registration that allows customers to more conveniently establish wagering accounts from home, as opposed to requiring that they show up at a physical sportsbook — such as in Nevada. Still another boost to sports wagering has been a moderate tax rate, which has helped attract so many operators. The state levies a tax of 10% tax on casinos’ net sports betting proceeds.
Meanwhile, every major sports franchise in Colorado has been busy forging partnerships with sports gambling operators that eventually will push both onsite (meaning at the sports venues themselves) and virtual sports gambling in an integrated approach. But like much in life, the full financial impacts and benefits of those business relationships won’t begin to be realized until 2021.
For instance, the Denver Broncos have already told their fans that the team’s home opener against the Tennessee Titans at Empower Field at Mile High will be played without fans. Hence, there won’t be very much foot traffic at the new Betfred wagering lounge just outside the stadium. Similarly, the benefits of the PointsBet partnership with the NBA’s Denver Nuggets, the NHL’s Colorado Avalanche and the NLL’s Colorado Mammoth, along with the Pepsi Center where those teams play, won’t bear fruit for a while.
However, once the world — sports and otherwise — returns to something approximating normal, Colorado will be poised for handles that will easily hit several billions of dollars annually.
While Colorado was at full speed almost immediately, Illinois sputtered getting sports wagering fully operational. A big part of the problem has been the state vacillating on whether to allow remote registration.
Illinois started allowing retail sports wagering in March. Then, the pandemic closed down casinos across the country. In June, Illinois Gov. J.B. Pritzker rolled back a requirement that sports bettors initially register at retail sports books because of pandemic considerations. In late July, that temporary exemption expired. Then, on Aug. 21, Pritzker reinstated the original order. Let’s face it, bettors have a tough enough time picking winners without trying to keep up with the vagaries of state regulations.
Bettors will hope things are settling down in Illinois, which is obviously an important sports betting market. It has the country’s sixth largest population, just behind Pennsylvania, and a rabid sports fandom. What needs to happen in Illinois? Remote registration needs to be permanent — incredibly, there’s another expiration of Sept. 19. And customers need more options; right now, the mobile choices are limited to BetRivers, DraftKings and recently, FanDuel.
Sports gambling debuted in Iowa in August 2019. The handle was $400 million in the first year. Obviously, that would have been better without a pandemic. And not surprising, online handle outpaced retail handle by about $100 million.
There was some drag on handle in that for the first 18 months, because Iowa customers have to show up at a physical sports book to register for an online account. That goes away at the end of 2020.
Check Out: Latest updates and legal Iowa Sports Betting Sites.
Were it not for the pandemic (and a prior governor), Michigan would probably be hitting on all cylinders. State legislators and regulators are trying to get both online sports gambling and online casino gambling up and running as soon as possible.
Pandemic or no pandemic, Michigan should have iGaming by now but former Gov. Rick Snyder vetoed an Internet gambling bill at the end of 2018.
The new governor, Gretchen Whitmer, did sign sports and iGaming legislation at the end of 2019, but Whitmer has been reluctant to speed the start of iGaming by allowing it to go forward on an emergency basis. But there are Michigan legislators who are determined to make it happen by the end of this year or early 2021.
Retail sports betting started just before the pandemic hit. Michigan’s efforts are further complicated because the state has both commercial and tribal casinos and each of those business constituencies has its own concerns.
Check Out: Latest updates and legal Virginia Sports Betting Sites.
Virginia is a late-to-the-party state when it comes to gambling overall. With the exception of some horse racing, the lottery and some bingo, Virginia has been a very quiet gambling state. That’s about to change, because casinos are on the horizon and online gaming is set to launch early in 2021.
The tax rate is 15% after the federal excise tax. That’s not a deal-breaker but it’s at the edge. Here’s where Virginia gets higher marks: The initial regulations had some interesting concepts for handling disordered gambling issues, such as putting a time clock on websites so gamblers would be reminded of how much time is spent gambling.
Also, there was the state’s recommendation that third-party requests for gambling “exclusion” be “honored” by the gambling operator. Admittedly, that’s a far-reaching notion and perhaps not even a good one. But it does show that Virginia is taking responsible gaming seriously.
Montana does have sports betting as of March at kiosks and online. In practice, no savvy bettor would risk serious money placing sports wagers in Montana. Operated by Intralot, Montana’s sports wagering opened in March with odds that were hugely off-market (see Washington D.C. below).
Intralot runs this online sports wagering operation as well. It opened earlier this year to jeers. As an example of what will keep gamblers away, let’s look at the recent money line on the Philadelphia Eagles at Washington Football Team in the NFL’s Week 1. The recent Intralot money line was Philly -312 and Washington +210. The same day William Hill’s Vegas money line was Philly -260, Washington +220. In other words, no matter which team you’re picking, you get worse odds with Intralot. Enough said.
Intralot aside, there is a William Hill retail sports book in the Capital One Center (where the Washington Wizards, Capitals and WNBA's Mystics play) and when the pandemic allows, it could turn out to be an interesting destination sportsbook.
Launched in the fall of 2019, the Oregon foray into sports wagering was dogged from the outset with problems. Start-up costs were higher than expected and the hold percentage was lower than projected. The result was more than a $5 million loss in the first nine months of fiscal year 2020.
The Granite State started online sports betting in December 2019 and in August 2020, the first retail operation opened. However, in New Hampshire, it’s all DraftKings all the time. At least for now. Both the statewide online operation and the retail sports book, located in a casino in Seabrook, are operated by the Boston-based daily fantasy and sports betting company.
Though New Hampshire reportedly received applications from more than a dozen operators, the state gave DraftKings a monopoly that obviously limits customer choice. As a result of having the market to itself, DraftKings is paying 51 percent of its online revenues to the state but that percentage goes down if other operators are permitted. The state lottery can also offer some sports betting products (such as parlays) with partner Intralot.
Tennessee has turned out to be the sports wagering world’s version of Waiting for Godot. Approval came in April 2019, before Indiana launched. But we’re including it in this list anyway because Tennessee is just so darn quirky.
Sports wagering in Tennessee started out oddly and remains a puzzle. First, there will be no retail sportsbooks, just online and mobile sports betting. Then, there has been delay after delay. Now comes the really good part. It comes with a mandated cap on payouts of 90 percent, which means there’s a minimum 10 percent hold.
Consider that sports wagering holds in Nevada generally run 5 to 6 percent and nationally under 7 percent — and the games are nearly impossible to beat at those prices — betting on sports in Tennessee would be akin to lighting money on fire. The state says that sports wagering will be up-and-running by Nov. 1. The better question is, who will care?
Check Out: Latest updates and legal Tennessee Sports Betting Sites.
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