The much-anticipated launch of Ohio online sportsbooks on January 1, 2023, blew away everybody’s expectations with $1.1 million wagered, over $200 in revenue and a tax bill greater than $20 million. However, neighboring states with legal sports betting watched their bottom lines decline.
Kentucky became the most recent state to launch online sports betting, with sportsbooks taking their first wagers on Thursday, September 28.
Is Ohio sports betting strong enough to withstand Kentucky’s entrance into the market, or will the Bluegrass State give the Buckeye State a taste of the medicine it’s been delivering all year?
Bluegrass State fast out of the gate
A post from GeoComply on Friday morning, September 29, confirmed that its software recorded over 2 million geolocation checks at Kentucky sportsbooks from almost 200,000 accounts in their first 24 hours.
That number rose to more than 10 million from over 325,000 accounts by the end of Monday Night Football.
Checks occur anytime a user interacts with a sportsbook, including registering for an account, logging in or placing a bet within a session.
Since Kentucky’s launch, our team has been collecting geolocation transaction data for GeoComply sportsbook customers in the state. In the first 24 hours, we recorded just over 2 million geolocation checks from nearly 200,000 accounts. pic.twitter.com/vPjscr77cR
— GeoComply (@GeoComply) September 29, 2023
By comparison, Ohio’s launch drew 11.3 million transactions from 784,000 accounts over its first two days, tops in the nation amidst a full slate of New Year’s Day NFL games. GeoComply reported Ohio sports bettors created over 2 million accounts in its first month of operation.
Ohio also has more than two-and-a-half times as many people, though, with 11.8 million residents to Kentucky’s 4.5 million. Per capita, Kentucky’s sports betting launch was as popular as Ohio’s by these metrics.
Ohio’s market is still growing
The Buckeye State’s sports betting market continues to grow in its first year, even if Ohio sports betting revenue fell back to earth in recent months. Its $378.8 million August handle was sixth best in the nation, missing the top five by less than $15 million.
August’s numbers rose by nearly 15% from July, and September’s numbers will climb even higher with the return of football season. On the opening weekend of the NFL season, GeoComply recorded 19.4 million checks from 854,000 accounts, including 133,000 new accounts created.
When Ohio sportsbooks went live, neighboring states like Pennsylvania, Indiana, Michigan and West Virginia had markets with two-plus years to entrench their in-state customer bases. Kentucky’s launch comes while Ohio is still setting its baseline.
It’s foolish to think that Kentuckians have not contributed a significant amount of business to Ohio sportsbooks. However, the number of Ohioan sign-ups will outweigh those losses.
And it will continue to hold its own
Since launching, three of Ohio’s four neighbors have shown year-over-year declines in wagers through August.
- Michigan: $2.59 billion handle (-11.8% YoY)
- Indiana: $2.49 billion handle (-9.7% YoY)
- West Virginia: $280.6 million handle (-15.7% YoY)
Pennsylvania’s $4.27 billion handle represents a flatline, up $3.2 million from 2022. This is the first time Pennsylvania sports betting revenue has not grown year-over-year, and Ohio has likely contributed to that.
Nonetheless, Pennsylvania has proven strong enough to withstand a giant like Ohio entering the market. Similarly, Illinois, New Jersey and Nevada remain top markets despite increased competition.
The same will go for Ohio despite its final neighbor joining the party.
If anything, Kentucky’s launch will have the most significant effect on Indiana. Its most populated areas lie on the Indiana border or closer to other neighbors like Illinois and Tennessee, except those outside Cincinnati.