The numbers are beginning to show that DraftKings’ metamorphosis from a daily fantasy sports operator to sportsbook-first company is moving at Ludicrous Speed. The DFS aspect of the company isn’t going anywhere, but the revenue and obviously growth potential in the U.S. is in legal sports betting.
At the ICE Sports Betting USA conference in Manhattan on Wednesday, DraftKings Co-Founder and CEO Jason Robins told Darren Rovell (who himself switched jerseys from ESPN to Action Network mid-conference) that 20 percent of the company’s business is currently being generated through sports betting. In New Jersey, where the DraftKings Sportsbook was first to market in the state in August, Robins said sports betting represents 80 percent of the company’s revenue.
In other words, the sports betting revenue being generated in just one state*, roughly four months post-launch, is currently accounting for 20 percent of the company’s overall revenue coming nationwide via daily fantasy sports contests.
DraftKings Sportsbook Already Driving 20 Percent of Company’s Revenue; Full Speed Ahead For Familiar Players As Expansion Continues
Read more DraftKings CEO Robins Reveals Sports Betting Already Crushing For Company Overall on SportsHandle.
The good news for the New Jersey sportsbooks in the newly released revenue report for October is a large jump in handle from $186 million in September to $261 in October. The downside is that the bettors took a bigger bite of the books this month than usual, cutting revenue by more than half month-over-month from $24 million in September to “just” $11.7 million in October.
Overall that spells a 4.4 percent hold, down from 13 percent in Sept., which may be partly attributable to baseball (more on this below) and perhaps moreso a lot of “public” teams covering the spread in October NFL contests. The rise in betting handle is almost entirely attributable to the mobile/one sector, which grew from $105 million in September to $174 million in October. On-site sports betting inched up from $79 million in the prior month to $86 million.
Resorts Digital continues to lead the way by a lap on the revenue front, reporting $5.1 million in October, which is nearly half of the entire haul across all sportsbooks for the month. An arm of Resorts Casino, Resorts Digital figures represent DraftKings Sportsbook as well as BetStarsNJ.com. We can no longer parse out which side is driving what, but based on prior figures we can safely say that DraftKings is responsible for the lion’s as well as the cub’s share. Let’s dig in a litter deeper now.
October Brick-and-Mortar Sportsbook Revenue:
- Bally’s: $303K
- Borgata: $120K
- Golden Nugget: $46K
- Harrah’s: $104K
- Meadowlands (FanDuel Sportsbook): $1.1 million
- Monmouth Park: $606K
- Ocean Resort: $438K
- Resorts: $97K
- Tropicana: $15K
A spokesperson for FanDuel Sportsboook said: “Demand for the FanDuel Sportsbook continues to outpace our expectations with online handle 2.5 times higher than September and continued double digit growth in retail handle. It was an exciting month for bettors who won at a high rate on football and benefitted from our industry-leading pricing and odds boosts.”
October Online Sportsbook Revenue:
- Bally’s (combination of CaesarsCasino & 888sport): $108K
- Borgata (PlayMGM): $67K
- FanDuel Sportsbook (Meadowlands): $2.43 million
- Golden Nugget (PlaySugarHouse): $151K
- Monmouth Park (William Hill and PlaySugarHouse): $609K
- Ocean Resort (William Hill): $385K
- Resorts Digital (combination of DK Sportsbook and BetStarsNJ.com): $5.1 million
Read more New Jersey Sports Betting Handle Surges to $261M, Revenue ‘Just’ $11M As Bettors Exact Revenge on SportsHandle.
As states across the country are discussing legal sports betting, there has been much ado about sportsbooks operating on thin margins, which is news to a lot of lawmakers. By most accounts, a sportsbook earns between $1-$2 in net revenue from every $100 bet after all the money is divvied up. So where does the money go?
Much of it goes back to the winning bettors and there are the obvious expenses — paying employees, buying software and equipment, purchasing or renting space. And then there are taxes. The seven states that have legalized sports betting so far* apply wildly different tax rates on gross sports wagering revenue, from 6.75 percent in Nevada to more than 50 percent in Rhode Island.
In states currently seeking to become a legal sports betting states, some lawmakers are looking to earmark tax revenue for specific programs. In Kentucky, legislators hope it will help alleviate the state’s (humongous) pension-fund issue and in Illinois lawmakers are hoping sports betting revenue will put a dent in the state’s budget shortfall, which is $1.2 billion for fiscal year 2019. Others like Washington D.C. are eyeing Arts and Humanities, and early childhood education programs.
It’s official — Mississippi loves it some football. The state’s gaming commission released its September sports betting numbers on Monday, and they are sky high. Magnolia State sports bettors wagered $31.77 million and produced $5.5 million in taxable revenue during the first full month of professional and college football. Those numbers dwarf August, which had $644,489 in taxable revenue on a $7.7 million handle.
The handle includes futures bets made, while the taxable revenue does not include futures bets, many of which are not yet decided.
Most notable was the state’s win percentage, which was a whopping 17.3 percent. For comparison, that number was 10 percent in August and Nevada traditionally has a 5 to 7 percent hold.
Read more Football Is King: MS September Sports Betting Handle Reaches $31.77 Million on SportsHandle.