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Considering the returns of the first four months of legal sports betting in Kentucky, residents of and visitors to the state will likely bet more than a billion dollars over the first six months of such activity. Through the first partial month and first three full months of legal betting in the state, that sum nearly reached $900 million.
Sportsbooks were able to win a very respectable portion of that money over the final four months of 2023. That led to over $15.5 million in tax revenue for Kentucky. While context is necessary to understand the debut of legal sports betting in Kentucky, it appears that the market is meeting expectations so far.
Kentucky sportsbooks claim $114.3 million in 2023 win
Of the $892.3 million that bettors wagered using licensed sportsbooks in Kentucky in 2023, the books won about 12.8% of that money according to the Kentucky Horse Racing Commission’s sports wagering report. As the industry standard for a good return for a sportsbook is winning 5%-10% of the money gambled, the final four months of the year were successful for licensees.
Physical sportsbooks began taking bets in Kentucky on Sept. 7, 2023, with KY online sportsbooks launching on Sept. 28. While the amount wagered through the remainder of 2023 is slightly behind some projections, the actual performance of sportsbooks in terms of win surpassed the estimate of $100 million by the end of 2023.
Additionally, tax revenue from this activity is likely to easily top Kentucky Gov. Andy Beshear’s initial projection of $23 million within the first year. Kentucky bettors behaved exactly as expected in another way.
October sets state records for legal sports betting in KY
The first full month with legal online sports betting in Kentucky, October 2023, accounted for the state’s highs in terms of both dollars wagered and sportsbook win. Kentuckians gambled just under $288 million during the month. Sportsbooks won about 16.4% of that money or more than $47.1 million.
In most states with legal online sportsbooks, the initial month has been one of the top five strongest if not the strongest month on record. For example, neighboring Ohio saw over a billion dollars in bets and more than $200 million in sportsbook win in its first month.
There are a few reasons why this is typical. First, it’s the new shiny thing that human beings tend to explore out of curiosity if nothing else. Licensed sportsbooks also tend to have some lead-in time during which they spend heavily on advertising to create that curiosity.
Additionally, launches are when those same licensees usually offer their most attractive promotions to new customers. Finally, the novelty of the launches are newsworthy items for media of all kinds in the jurisdictions, which also helps to raise awareness among the general population.
Through the first four months, Kentucky’s sports betting landscape looks about exactly as stakeholders predicted it would appear. Future releases from regulators in the state will either further reinforce that narrative or throw it into question.
