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Sports Wagering Milestones Keep Coming With Final ’23 Numbers


Everything about 2023 in sports wagering was big: big handles, big operator revenue, and big state tax revenue derived from that big operator revenue.

As the final state sports betting revenue reports from 2023 continue to filter in, there have been multiple benchmarks reached, ranging from weekly (hello, New York!) to monthly to annually to all-time. Some were expected with more states entering the marketplace, but some also felt like wishing on a star looking back to a time when betting became available on a state-by-state basis in 2018.

Without further ado, here’s a look at the three most recent benchmarks for the industry and how we got there.

$300 billion all-time sports wagering handle

If someone had offered odds on hitting this number on Jan. 1, it would have been somewhere in the -120 to -125 range for “yes” as a yes/no wager. There were tailwinds in 2022 that offered the possibility, as national handle surged to $93.8 million. New York entered the mobile betting space and exceeded the hype it brought while Maryland and Louisiana upgraded to include digital apps over the course of 2022.

Additionally, 2023 offered plenty of promise with Ohio and Massachusetts entering the marketplace. The Buckeye State would have the largest simultaneous launch in the post-PASPA era, while Massachusetts would provide an answer to just how devoted Boston-based sports teams were when it came to support. All that said, asking for $110 billion worth of wagers in a 12-month period for a still-maturing industry was not a fait accompli while the overall U.S. economy moved in fits and starts due to supply chain issues and inflation.

Ohio lived up to expectations with a billion-dollar debut, fueling a record $11.5 billion handle. A frenetic high-scoring Super Bowl LVII between the Kansas City Chiefs and Philadelphia Eagles helped February wagering improve by more than $1 billion year-over-year, and the Bay State’s digital debut in time for the NCAA Tournament in March put that month’s total within $250 million of January’s record.

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Things slowed down from April to August with baseball the main act in U.S. sports betting, but the $36 billion-plus wagered in that span was still nearly $7 billion more than the comparable period in 2022. All the while, people continued to eagerly await the return of the NFL, the undisputed king when it comes to the sports betting marketplace.

By Sept. 1, U.S. handle was tracking to $100 million. Wagering totaled more than $67.8 million the first eight months and was $11.7 million ahead of 2022’s pace. September marked the start of the “silly season,” and so it went as the nearly $11.2 billion wagered was up 41.2% (close to $3.3 billion) year-over-year.

October and its five weekends saw the first crossing into $12 billion monthly handle, which made $100 billion a foregone conclusion and $300 billion total handle move from probable to likely. ESPN BET removed all doubts about that last outcome by packing the promotional money cannon with its mid-November entrance.

Sixteen states set all-time handle highs in monthly handle, with the Empire State making history by becoming the first to reach $2 billion. Kentucky should make that total 17 when it releases its November figures, considering it will be the first time commonwealth bettors can legally wager on the Wildcats within state lines.

October and November’s surge in betting made December’s reports little more than a guessing game as to which report would provide the historic moment. Of course, there would be one last plot twist, as Illinois‘ record November handle of nearly $1.38 billion provided the amount needed to surpass $300 billion.

$10 billion gross operator revenue in 2023

If presented as a yes/no wager similar to $300 billion handle, this would have been closer to even. Hidden in the nearly $7.56 billion in operator winnings from 2022 was nearly 59% of that amount — $4.45 billion — came in the second half of the year.

That coincided with the house laying the wood to the betting public on a monthly basis in the context of surpassing the 7% industry standard hold. Operator win rate based on gross revenue the final six months of 2022 was 9.44% compared to 6.66% in the opening six, and handle was split nearly evenly.

This was another instance where the actual dollar amount to get to that $10 billion figure compared to 2022 also had the feel of a tall ask at more than $2.4 billion. What took hold, however, was operators marketed same game parlay wagering more aggressively in newer marketplaces and bettors gravitated to it.

It became all the rage, and that popularity would be reinforced by pre-loaded SGPs on the landing page after bettors logged onto their betting apps. It is not exactly a virtuous cycle, but it has proven to be a sound business model most have copied from FanDuel — the first mover in the SGP space.

Parlay revenue among the seven states that provide such figures in 2022 and 2023 — New Jersey, Illinois, Nevada, Colorado, Louisiana, Oregon, and Mississippi — is up 40% compared to 2022 at more than $1.48 billion. That does not include what will likely be a huge number from Illinois in December resulting in overtaking New Jersey for the top spot.

Maryland sports betting did not have a sub-10% hold for the first nine months mobile apps were available until operators were “held” to 9.4% in September. The Old Line State only started providing parlay figures in June; they accounted for nearly $3 of $11 wagered, but almost $1 of every $2 in gross operator winnings in those seven months.

Even anecdotally, the data was there. As surprising as Ohio’s debut handle was, the $209 million in gross revenue — still the all-time monthly high post-PASPA — was shocking. New York kept inching higher: $149.4 million in January, $162.8 million in March, $165.6 million in September, $166.3 million in October, and $188.3 million in December.

Mid-size states horned in on the act. Indiana sports betting posted five of its Top 10 revenue hauls in 2023, all above $36 million. Three of Iowa‘s five months with $20 million in revenue and six of its top 10 all-time totals occurred in 2023. Louisiana generated roughly two-thirds the Hoosier State’s $4.34 billion handle and had more than 90% of the $404.1 million revenue.

There have already been four months in which gross operator revenue surpassed $1 billion in 2023, and December is easily tracking to be #5. Only November’s win rate will be below the 7% industry standard, and that snapped a 16-month run with operators keeping it above 7.9%.

It turned out 2023 was such a good year for the house that Tuesday brought an unexpected milestone with Arizona‘s numbers for November: All-time U.S. gross operator revenue topped $25 billion.

$2 billion in state taxes generated in 2023

Granted, this is more New York than any other state, as its $862.6 million in taxes that went towards state education have so far accounted for more than 41% of the nearly $2.08 billion in state taxes generated from operator revenue in 2023.

That hefty figure is a byproduct of multiple parts coming together. Operators have performed better in a majority of marketplaces on a state-by-state basis. Newer states opted for higher tax rates that walk the line between business-friendly and what operators would call onerous, and some states closed significant promotional and bonus loopholes that allow them to levy taxes on a higher percentage of gross revenue.

Adjusted gross revenue is up 42.2% versus the full-year 2022 total compared to gross revenue increasing 36.3%, and both have easily outpaced the 23.1% rise to date in handle. The Empire State skews the tax total more intensely thanks to its 51% tax on mobile revenue, but that is currently 38.2% higher and within $27 million of reaching 40%. Eight states have totaled at least $75 million in tax revenue compared to only four in 2022, and five have collected $100 million-plus.

Six states had at least $9 million in full-year increases versus 2022, while two others are projected to have year-over-year gains of at least $6 million. Another nine will see tax revenue increase between $1 million and $5 million, and the overall amount generated in 2023 could wind up being approximately 47% of the projected all-time total of $4.6 billion.

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