Illinois Smashes Through the $1 Billion Barrier
Illinois sportsbooks reported a monthly handle of more than $1 billion for the first time in October. It represented a 24% month-on-month increase compared to September, driven by a large volume of NFL wagers. That makes Illinois just the fourth state to smash through the $1 billion barrier on a monthly basis, following in the footsteps of Nevada, New Jersey and New York.
In August, the handle in Illinois was just $565 million. That increased to $831.8 million in September after the pro football season began, and it jumped again to reach $1.03 billion in October. That left Illinois as the third largest state for sports betting in the country. New York is the clear leader, with $1.54 billion handled in November. New Jersey was narrowly ahead of Illinois, with a handle of $1.06 billion, but the Prairie State is quickly catching up. It is also comfortably ahead of Nevada and Pennsylvania, which handled $916.5 million and $797.1 million respectively in October.
Straight football bets accounted for $358.2 million of the Illinois handle in October, while bettors spent $259.3 million on parlays. Basketball was a distant second, with $114.4 million wagered during October. Revenue increased 30% month-on-month to $102.1 million, leaving the state with $16.4 million in taxes.
Illinois Industry Goes from Strength to Strength
It is now two-and-a-half years since Chicago Blackhawks star Eddie Olczyk placed the ceremonial first online wager in Illinois. The industry made a slow start during the pandemic, but it is now going from strength to strength. More than $16.5 billion has been wagered at the state’s legal sportsbooks, resulting in more than $200 million in tax revenue for the state over the past couple of years.
FanDuel Sportsbook led the way with $328.6 million in handle, leaving it narrowly ahead of DraftKings on $324.1 million. They dominated the market, but BetMGM also went past $50 million for the first time, while Caesars enjoyed its best ever month in Illinois at $47.6 million. BetRivers was the third most popular sportsbook in the state, with a handle of $97.5 million, ahead of PointsBet at $75.2 million.
October is generally a strong month for sports betting on a nationwide basis, with the NFL in full swing and the NBA and NHL seasons beginning. The handle could increase again when November’s figures are revealed, as they will include a full month of NBA and NHL action, plus the first few weeks of the college basketball season. January is typically the busiest month for sportsbooks, and it will be interesting to see if Illinois can overtake New Jersey by that point.
Maryland Makes a Flying Start
Elsewhere, the new legal online sports betting industry in Maryland got off to a flying start. Bettors in the Old Line State wagered $186 million via mobile apps and websites in the first nine days following the official launch on November 23, according to new figures from the Maryland Lottery and Gaming Commission. Sportsbooks held 13.9% of those wagers, giving them revenue of $25.9 million. However, they invested $63 million in bonus credits, so the state only earned $4,261 in taxes from online sports betting in November.
Marylanders voted in favor of sports betting back in November 2020. The first retail sportsbooks launched in December 2021 at MGM National Harbor, Horseshoe Baltimore and Live! Casino. However, the process of issuing licenses to online operators faced major delays due to requirements for a diversity study, which the Attorney General’s office inserted into the Maryland sports betting bill. Regulators eventually abandoned plans to conduct that study following pressure from Governor Larry Hogan, and the first tranche of online sportsbooks finally was finally cleared to launch on November 23.
Seven operators went live on that date. FanDuel emerged as the clear market leader during the first nine days, with a handle of $89.9 million. That left it with a market share of 48%. DraftKings was next ($69.6 million / 37%), followed by BetMGM ($15.07 million / 8%), Barstool ($5.5 million / 3%), Caesars Sportsbook ($3.46 million / 2%), PointsBet ($1.6 million / 0.86%) and BetRivers ($631,175 / 0.34%). Despite taking the smallest handle, BetRivers was the only operator with positive revenue, as it spent a lot less on promotional credits than rivals. It contributed $4,261 in taxes, whereas none of the others did.
Commission Expects Promotions to be Curtailed Over Time
Maryland is one of many states that allows sportsbooks to deduct promotional spend before paying taxes on their remaining revenue. New York has never permitted such write-offs, and Colorado and Virginia recently changed their laws to prevent them, but they remain in place across much of the country. However, the Maryland Lottery and Gaming Commission is confident that they will ease off after the initial frenzy subsides.
“We expect mobile sportsbook operators to continue to offer a lot of promotional wagers in the coming months as they venture into a new market and work to attract customers,” said Maryland Lottery and Gaming Director John Martin. “There was tremendous pent up demand, and a lot of people are utilizing promotional offers from multiple operators simultaneously. But as many of the operators have acknowledged, this level of promotional play is not sustainable, and based on our regulations, it will be curtailed over time.
“Deducting promotional play obviously has an impact on the bottom line, and that’s why we have a cap that takes effect after each operator’s first full fiscal year,” Martin said. “It protects the state’s interests and ensures that sports wagering will generate revenue for education, as intended. By awarding large amounts of promotional play in their first fiscal year, the sportsbooks’ promo play amounts will be limited in their second year.”
In their first year of operating, online sportsbooks can spend an unlimited amount on promotions. That will help them build up their player bases in Maryland. However, after the first full fiscal year, regulations require that a sportsbook’s promotional play amount may not exceed 20% of its taxable win from the prior year.