Ohioans appear to be enjoying their new legal sports betting options.
The Ohio sports betting market has taken over $3 billion in bets during the state’s first four months of operation — one of the fastest starts in industry history. Based on the early figures, Ohio could become a top-three U.S. sports betting state in its first year of existence.
Ohio sportsbooks have to be pleased with the market so far, but how has it treated Ohio bettors?
Hold is high in Ohio but fueled by promotions
Typically, bettors do not want to see a high hold for their favorite betting options.
Hold is the percent of total bets the house keeps, meaning a high hold equals less money being paid back to bettors in the form of winnings.
Through April, Ohio sportsbooks have a 15% hold on the state’s $3,014,214,051 handle. That means the state has made $451,049,931 in revenue.
A 15% hold is quite high compared to the industry’s average of around 8%.
On the surface, it looks like Ohio sportsbooks are by far the least generous in the Midwest, but that’s only part of the picture.
Ohio sportsbooks have doled out nearly half a billion in promotions
Ohio’s January launch was clearly a bonanza for the state’s sportsbooks, which set a record with over $1.1 billion in betting volume.
But the books did their part to fuel such a lightning-fast start: Ohio online sportsbooks gave away over $300 million in promotional credits that month alone.
To date, Ohio sportsbooks have spent over $447 million in “promotional gaming credits” — typically bonus bets or deposit matches that entice new customers or engage current bettors with higher, +EV odds around specific events.
Every dollar of promotional spending has come from the 18 online sportsbooks currently up and running in Ohio. The sportsbooks have actually given out more in promotions than they’ve taken in revenue over the first four months.
Ohio online sportsbook promotions vs. revenue 2023
- Promotions: $447,631,089
- Revenue: $440,397,046
The state’s retail sportsbooks have not reported any promotional gaming credits, although they often use other in-house promotions, like giveaways and rewards programs, in conjunction with their sportsbooks.
Promotional spending is decreasing, as is hold
Ohio’s sports betting law does not allow sportsbooks to deduct promotional spending from gross revenue, meaning the books are paying taxes on $440 million in revenue despite handing bettors $447 million in credits.
So it goes without saying that the promotions won’t be around forever — at least not in such volume. Promotional spending has, in fact, declined every month since sports betting kicked off on Jan. 1.
Ohio online sportsbook promotional spending
- January: $319,859,717
- February: $59,132,288
- March: $44,448,723
- April: $24,190,361
- YTD: $447,631,089
The good news for bettors: Ohio’s hold rate is also falling.
Ohio online sportsbook hold%
- January: 18.9%
- February: 12.9%
- March: 12.9%
- April: 12.3%
- YTD: 15.0%
Hold unlikely to fall until promotions run dry
Acquiring customers is a long game for sportsbooks, which is why there are still generous sign-up offers and bonuses in Ohio.
While most sportsbooks have transitioned their sign-up offers from straight-up bonus bets to the less lucrative (for bettors) deposit matches and bet insurance deals, some are still offering hundreds of dollars just for signing up.
Bet365 Sportsbook Ohio hasn’t changed its “bet $1, get $200 in bonus bets” since the state’s launch. And DraftKings Sportsbook is currently offering a “bet $5 get $200” in promotional credits deal for new users — nearly the same as the sportsbook’s prelaunch offer.
Ohioans can expect a higher hold as long as the promos are flowing in the state, so it’s a good news/bad news situation: The promos will eventually disappear, leading to more revenue coming back to bettors and a lower hold.
Do Ohioans love parlays? Well, most do!
Ohio does not track betting volume by betting type, but parlays have become a massive money-maker for sportsbooks industry-wide.
Every day, sportsbooks build pre-made parlays, often sponsored by brand ambassadors, and put them in front of bettors on their sportsbook apps. They might even toss a slight odds boost on top, knowing that the vast majority of these bets will lose. These bets have long odds, meaning big payouts for the ones that win.
Most parlays do not win, of course. But that hasn’t stopped bettors from fueling the rise of same-game parlays, or SGPs. With SGPs, bettors can choose multiple bets within the same game, like a starting pitcher’s strikeout total combined with a player in the same game to get a hit. Since multiple outcomes have to happen, the odds exponentially increase as more legs are added to the bet.
SGPs are available across most sports, and bettors flock to them despite the huge wins sportsbooks are reporting on these bets.
In New Jersey, which breaks down bets by type, sportsbooks reported $301,617,356 in revenue so far this year. More than half — $171,207,108 — came from parlays.
New Jersey sportsbook win rate by bet type:
- Football: 6.2%
- Basketball: 3.4%
- Baseball: 5.5%
- Parlay: 18.9%
- Other: 5.6%
As the Ohio sports betting market continues to normalize, with fewer promotions and more generous payouts, Ohio bettors will want to keep in mind how lucrative parlays are for the books.
