Sports betting revenue in Ohio falls in February
COLUMBUS, Ohio (WCMH) -- Legalized sports betting ushered in millions of dollars in new revenue when it launched in Ohio in January.
The latest report shows a steep decline in that revenue as Ohioans placed fewer bets in February, although revenue was still well in the millions.
In January, Ohioans bet more than $1.1 billion on sporting events, generating $209 million in revenue for gaming operators, according to the monthly revenue report from the Ohio Casino Control Commission (OCCC).
Sports betting revenue in Ohio is taxed at 10%, meaning the state hauled in more than $20 million in tax revenue in January alone.
February's revenue report shows $638 million in bets placed, generating just over $8 million in revenue for the state.
"I can't say that it was completely unexpected," said Jessica Franks, the spokesperson for the OCCC. "We had a lot of, you know, built up, pent up... excitement over the launch in January.”
She said there are two major factors that explain the sudden slowdown in sports betting: marketing and the sports calendar.
Ahead of the debut of sports betting in Ohio, online sportsbooks, such as FanDuel and DraftKings, advertised aggressively and offered customers "free bets" or "bonus cash" in exchange for starting an account on their platforms.
The OCCC categorizes bets placed using money given to the bettor by the sportsbook as "promotional."
Promotional betting in January reached nearly $320 million, accounting for just more than a third of total bets placed that month. In February, promotional betting shrunk to $59 million, which was less than a tenth of that month's total receipts.
“Now that we're beyond the launch period, some of those marketing tactics might be starting to change a little bit, so that could be a part of the reason is that there's just there wasn't quite that level of promotional play being used,” Franks said.
Franks also said the sports calendar likely contributed to the decrease in bets, as football draws more betting activity than any other sport.
The vast majority of the sports betting revenue goes into a K-12 education fund. Small portions also go to veterans’ services and resources for gambling addiction.
Robert Linnehan of sportsbettingdime.com writes about sports betting regulations across states that have legalized the activity or are preparing to do so. He said Ohio's recent decline in sports betting follows a pattern of other states.
"New York had a decline in its second month of operation,” Linnehan said. “Maryland had a decline in its second month of operation. For Massachusetts, you're absolutely going to see a decline in the second month of their operations.”
Still, Ohio remains one of the hottest states for sports betting.
"For the first two months of 2023, Ohio is third -- behind New York, behind New Jersey-- for total amount bet in a state," Linnehan said. "I would expect the numbers to go back up for March. You know, you might not hit that billion-dollar mark again, but just with the amount of college basketball that you can bet on and the March Madness tournament that we just had, I would expect the numbers to rebound nicely."