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  • March US Sports Betting Market Monitor: Ohio bettors lap up $320m in promo offers
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Sports betting customers in Ohio received $320m in free bets during the first month following the market’s launch in January.

That’s according to the latest Sports Betting Market Monitor published by Eilers & Krejcik Gaming (EKG).

Ohio goes loco on promos 

EKG pointed out that the $320m handed out in free bets during Ohio’s opening month of online sports betting far exceeded the levels observed in other states on a per-adult basis.

According to the latest figures published by the United States Census Bureau, the figure works out to around $35 for every one of the 9.2 million over-18s in the state (although sports bettors must be over 21).

That puts operators’ per-adult free bet spend in the state’s first month well ahead of in Maryland and Kansas, where the figures are below $20 per adult, and vastly ahead of Virginia, Michigan, Colorado and Pennsylvania where per-adult promotional spend was under $5.

Aggressive bonusing remains the customer acquisition channel de rigueur in the US, EKG pointed out, while acknowledging that operators varied significantly in the percentage of GGR they were willing to spend on it.

Still, “almost every operator with more than 1% market share was above 100% GGR for bonusing spend,” the report pointed out.

Caesars spent 90% of its GGR on bonuses in the market’s first month, while bet365 doubled down by spending 190%. Longtime rivals DraftKings and FanDuel spent 157% and 163%, respectively.

And as their competitors in the market such as Caesars and BetMGM continue to tighten their belts, the market-leading former DFS brands are only getting “ever more aggressive in each market they enter,” EKG added.

The strategy appears to be working. According to some “crude metrics” employed by EKG, FanDuel likely acquired somewhere in the region of 772,000 new players in Ohio’s first month – around 8% of the state’s adult population.

DraftKings spent roughly half as much as the Flutter-owned brand on its bonuses, but whichever way you slice the numbers, most scenarios point to the operator onboarding well in excess of 100,000 customers.

Bonus spend is expected to fall rapidly as the market’s early days are left behind, as has been witnessed in several other markets across the US.

March Madness

Looking to the month ahead, EKG also provided some expectations for the NCAA basketball March Madness tournament, which starts today (14 March).

The report puts estimates for betting handle on the tournament across the US at $2.59bn, with Nevada (14%), New York (13%) and Ohio (11%) making up the three biggest states by handle.

Despite its relatively small population compared to other states, Nevada’s plethora of retail betting options makes the state “the nation’s premier destination for major sports betting events,” hence the expectation for it to lead the way in terms of betting handle during the competition.

The 26 other states with active sports betting markets are expected to account for the remaining 60% or so of March Madness betting handle.

Recent figures released by the American Gaming Association (AGA) showed that roughly one in four Americans are expected to place some kind of bet on the tournament this year.

Profitability push

In the report, EKG questioned whether broad pushes towards profitability in the market (a major theme across many firms’ Q4 earnings reports) will in fact simply play into the hands of market leader FanDuel.

The Flutter Entertainment-owned firm is of course set to be EBITDA positive for the whole of 2023, having reported its first profitable periods last year.

It stated in its Q4 report, however, that this had not been an intentional decision as such, but rather simply the effect of having so many active customers.

The firm remains aggressive in its customer acquisition strategy, as outlined in the Ohio bonusing breakdown above, and has achieved market share above 50% in that market and in Maryland.

One question that remains is whether FanDuel will be able to hold onto those customers once the market launch excitement fades, but data from other US markets to-date suggests that it will.

Looking internationally to comparable markets which are more mature, however, 50% market share is “unrealistic long term,” according to EKG.

Either way, with FanDuel refusing to back down on its acquisition strategy, a tightening of belts across the industry may well serve to help it dominate the market further.

Market overview by operator

Regular readers of the Sports Betting Market Monitor will find no surprises here.

FanDuel continues to dominate around half of the US market with 48.6% of GGR share, while DraftKings and BetMGM do a good job of mopping up most of the remainder, with 26.9% and 11.4% respectively.

Again, Caesars (and William Hill) bring up the rear in fourth, with 5.5% of market share, while BetRivers, Penn Entertainment’s Barstool Sportsbook and PointsBet also managed to take a heroic more than 1% of market share.

The 50 or so other operators in the market were once again left fighting over the crumbs.

EKG’s 79-page monthly report provides a digest of news and data points, including forecasts, for the emerging market for regulated sports betting in the United States. Please contact managing director Chris Krafcik for more information.  

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