Kentucky Suffers Drop In October Sports Betting Revenues

The Kentucky Horse Racing Commission. October numbers painted a starkly different picture compared to the same period last year, with gross revenue dropping by 61.3% to $18.8 million.

While the revenue decline is certainly eye-catching, it’s important to note that the overall handle – the total amount wagered – also experienced a dip, albeit a more modest one. October saw a handle of $274.9 million, representing a 4.5% decrease from the previous year. This suggests that while betting activity remained relatively robust, operators faced challenges in converting wagers into revenue.

October’s performance saw a dramatic drop in hold percentage, in October 2023, operators enjoyed a healthy 18.6% hold rate, indicating a favourable run of results. Fast forward to 2024, and that figure plummeted to just 7.7%.

The impact of these factors is clearly reflected in the adjusted revenue figures. October saw adjusted revenue of $20.5 million, representing a 62.1% year-over-year decrease. This figure also marks a 39.1% decline from the previous month.

Kentucky’s tax revenue from sports betting took a significant hit, with the state collecting just under $3 million in Octobe, this marks a substantial decrease from the $7.6 million generated in the same month of the previous year.

October 2024 proved to be a particularly challenging month for Kentucky’s retail sportsbooks. For the first time since the legalization of sports betting in the state, brick-and-mortar operations reported an overall loss. On a handle of $9.8 million, retail sportsbooks posted a collective loss of $78,000.

In contrast to their retail counterparts, online sports betting operators managed to maintain a degree of profitability. With a handle of $265.1 million, online platforms achieved a respectable 8% hold rate. While this figure represents a decline from the previous year’s performance.

Despite the overall market downturn, DraftKings achieved a significant milestone in October. The operator became the first in Kentucky to surpass $1 billion in total wagers accepted since the legalization of sports betting in the state. With a handle of $102.7 million for the month.

While DraftKings may have claimed the handle crown, FanDuel emerged as the revenue leader for October 2023. Despite a slightly lower handle of $92.3 million, FanDuel generated an impressive $9.8 million in revenue, thanks to a robust 10.6% hold rate.

The Race to $1 Billion

As DraftKings celebrates its billion-dollar milestone, all eyes are now on FanDuel as it approaches the same threshold. With a cumulative handle of $994 million since the market’s inception, FanDuel is poised to join the billion-dollar club in the coming months.

While DraftKings and FanDuel continue to dominate the headlines, other operators are making their presence felt in the Kentucky market. bet365, in particular, has emerged as a strong contender, generating a handle of $24.5 million in October 2023. More importantly, bet365 was one of only three operators to surpass the $1 million revenue mark for the month.

October proved to be a challenging month for some of the industry’s established names. BetMGM saw its revenue drop by 47% month-over-month, with a hold rate of just under 6%. Caesars fared even worse, managing to retain only 3.4% of the $11.5 million wagered on its platform.

Fanatics Sportsbook maintained its handle from the previous month but saw a decrease in revenue. Meanwhile, ESPN BET made its debut in the state, achieving a 6.3% win rate on a handle of $6.5 million.