Since the launch of sports betting in Ohio at the start of the year, FanDuel Sportsbook and DraftKings Sportsbook have by far been the top two performing online sportsbooks, accounting for 72% of all sports bets placed online in the state.
Within the second-tier of Ohio sportsbooks, a small handful of operators have been vying for third place among Ohio’s market-share leaders.
Two of those operators, BetMGM Sportsbook and Caesars Sportsbook, have a lot of things in common on the surface, but their approaches to Ohio have been markedly different in the first several months of sports betting in the state.
BetMGM has spent heavily on promotions, operating at a loss after huge promotional spending in January but securing a bigger market share while slowly making back profits. Caesars has been more reserved with promos, beating BetMGM in revenue on a fraction of the betting volume.
These two sportsbooks are in Ohio for the long haul, and it will be interesting to see which approach proves more lucrative down the line.
BetMGM battles Caesars, others for third place in Ohio
In the first five months of Ohio’s sports betting revenue reports, BetMGM Sportsbook Ohio has held fairly solidly to the third place position of sportsbooks in the state with a 7.5% market share. It’s followed by bet365 Sportsbook Ohio, a relative newcomer to the U.S. sports gaming market, which nabbed 5.8% of the market share from January-May thanks to aggressive spending on promotions.
Caesars Sportsbook OH checks in as Ohio’s sixth-best performing sportsbook in the first five months of 2023 with a 4.4% share of the market, just behind Barstool Sportsbook, which had a 4.6% market share.
Caesars appears to be taking a steady, patient approach to Ohio. Month to month, Caesars has been the only sportsbook in Ohio’s top six to increase its market share with each monthly revenue report, going from 2.9% in January to 5.6% in May.
BetMGM’s promotional spending higher than revenue in first months
The handle for BetMGM in the first five months of the year was over $100 million more than Caesars’.
BetMGM’s raw revenue numbers during that time were also far greater than what was reported for Caesars. BetMGM’s revenue through May was $42.4 million vs. Caesars’ $13.2 million.
But take away what each sportsbook spent from January through May on promotions and the numbers look much different. (Ohio doesn’t allow sportsbooks to deduct promotional spending from their taxable revenue.)
In the lead up to and during January’s launch in Ohio, in an effort to gain a foothold in the market and compete for new users, BetMGM was one of several sportsbooks to spend more on promotions (like new user bonus bets or deposit matches) than what they took home in revenue.
In January, BetMGM spent $27.3 million on promotions and reported revenue of $21.6 million, a difference of $5.7 million. While the sportsbook tempered its promo spending in the ensuing months — though still remaining one of the top-spending sportsbooks on promotions — BetMGM, as of May’s reports, still hadn’t made up for that initial big promo spend blitz.
Through May, BetMGM has posted $42.4 million in revenue while spending around $42.7 on promotions. If you subtract YTD promo spending from the YTD revenue number, BetMGM has lost more than $300,000 in Ohio during the first five months of sports betting.
BetMGM vs. Caesars Ohio YTD
|Handle||Promo spend||Revenue||Revenue - promo spend|
Minus promo spending, BetMGM and Caesars a lot closer in revenue numbers
Caesars, on the other hand, has been far more modest in its promo spending in Ohio, steadily reducing the amount spent with each successive month.
BetMGM’s promotional spending was 17.1% of its total handle in Ohio through May. Caesars’ promo spend was 4.4% of its handle during the same time period.
That has helped Caesars’ revenue numbers stay far ahead of its promo spending. Through May, Caesars’ revenue was $13.2 million, almost exactly twice as much as the company spent on promotions.
Minus promotional spending, Caesars’ revenue in Ohio from January through May was $6.6 million.
Looking at handle and revenue numbers in the first five months of 2023, BetMGM appears to be doing considerably better in Ohio than Caesars. BetMGM’s handle was 59% higher than Caesars, while posting 31% percent more revenue.
But if you subtract promotional spending from revenue, the competition is much closer. Minus promotional spending, Caesars had higher monthly revenue than BetMGM twice, in February and May.
Interestingly, if you ignore January’s figures — when BetMGM went huge with promotions, leading to a $5.6 million hole — BetMGM and Caesars are in a similar place revenue-wise. But BetMGM used $15.5 million in promotions to turn a $5.3 million profit, while Caesars made nearly $6.3 million on just under $2.9 million in promos.
BetMGM vs. Caesars Ohio revenue February-May
|Handle||Promo spend||Revenue||Revenue - promo spend|
In other markets, BetMGM cuts spending, Caesars surges
BetMGM in May was still in the top four in promotional spending in Ohio, behind only FanDuel, DraftKings and Bet365. But there are signs that the sportsbook may pull back on its promo spending even further.
BetMGM promo spending from April to May in Ohio decreased by 13.8%. But according to the Earnings+More gambling industry newsletter, BetMGM’s promotional spend in the more mature markets of Michigan, Pennsylvania and Maryland dropped by up to 40% in May, even as the total promotional spending in those markets increased.
Meanwhile, Caesars’ hold-steady approach appears to have been paying off in other markets.
In Pennsylvania, according to Legal Sports Report, Caesars’ May handle was $25.2 million, good for a 5.5% share of the state’s sports betting market. In January of 2022, Caesars’ share of the state’s monthly handle was less than 1%. Caesars was fourth in the Keystone State for May in terms of handle, behind old foe BetMGM and The Big 2 and leapfrogging Barstool, which has been trending down in the state over the same period.
If promotional spending continues to level off in Ohio and both sportsbooks stay on their current paths, it will be interesting to see where BetMGM and Caesars end up.
BetMGM and Caesars have a lot in common
Outside of their different approaches to Ohio, Caesars and BetMGM have a lot of similarities. They both benefit from recognizable names associated with legacy gambling brands, for example.
Though Caesars seems to have pulled back advertising in Ohio somewhat, both it and BetMGM have launched splashy commercial campaigns with notable celebrity spokespeople. BetMGM has had the likes of superstar Jamie Foxx and NBA legend Kevin Garnett, while Caesars ads have included the Manning brothers, comedian J.B. Smoove and actor Vince Vaughn.
Product-wise, both provide similar odds and both have well-reviewed platforms that are sturdy, reliable and user-friendly. BetMGM has a few more betting options and provides live-streaming of some sporting events within its app. The slightly more streamlined Caesars app might be more appealing to newcomers and more casual bettors.
Caesars also has more odds boosts and rotating promotional offers on its platform, but, in Ohio, both have similar sign-up bonuses for new users at the moment:
- Caesars’ welcome bonus gives new users up to $1,250 in bet credits if your first bet loses.
- At BetMGM, new users’ first wager (up to $1,000) will be paid back in bonus bets if it loses.
Time will tell whether BetMGM’s push for new customers out of the gate will pay off. For now, BetMGM and Caesars both appear to have healthy footholds in the Ohio sports betting market and clear paths to profitability.