Betting $1 billion: 5 takeaways from first month of sports gambling

Ohioans bet more than $1.1 billion on sports the first month it became legal to do so throughout the state.

The first revenue numbers for sports betting, released Tuesday, offer clues to the industry's future and its effect on Ohioans.

Bets are likely to increase as various sports seasons commence later this year, said John Holden, an assistant professor of business and sport management at Oklahoma State University. Along with a rise in bets, Ohio is also likely to see a jump in gambling addiction, said Derek Longmeier, executive director for the Problem Gambling Network of Ohio.

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With March Madness around the corner, sports betting is likely to remain in the spotlight, Holden said. But that means any issues with sports betting will also be under intense scrutiny as the year progresses.

Here's what Holden and Longmeier said they expect to happen in the year ahead with sports betting now legal statewide.

January is usually a big month for sports betting. But numbers could have been "scary bigger" if Ohio State University had made the college football national championship, Holden said.

Going forward, Holden said he expects March will be a big month for bets in Ohio due to the NCAA basketball tournament.

As the NBA winds down, summer will be a down period for sports betting because baseball simply doesn't attract as many bettors, Holden said. But betting will ramp back up dramatically in late summer and early fall as Ohio State takes the field again and as the NFL season gets underway, Holden said.

"College football is big, but the NFL playoffs are king," Holden said.

Although it's hard to know for sure this early, gambling addiction is likely on the rise, Longmeier said.

In January, the network's helpline received 1,492 calls, he said. That's more than triple the number of calls the helpline received in January 2022.

Causes for the increased calls are likely twofold, Longmeier said.

Read More:Ohioans placed more than $1 billion in sports bets the first month it was legal

Sports betting ads that have popped up everywhere are required to list the helpline number. Those ads have likely made the helpline more visible than ever before, Longmeier said.

But Longmeier said it's likely that increased awareness isn't the only reason for the rise in calls.

"We've already seen it," Longmeier said. "it's definitely a combination and this was definitely something we knew was coming."

The vast majority of bets placed on games in the first month of legalized sports betting weren't placed in person.

Instead, Ohioans largely wagered on sports from their phones, tablets and computers, data from the Ohio Casino Control Commission shows.

Of the more than $1.1 billion spent on sports bets in January, $1.09 billion was placed online through sportsbooks. By comparison, just $22.9 million were placed at casinos or other retail spaces and $850,336 were placed at kiosks supervised by the Ohio Lottery.

"If you have online betting, that's how people are going to do it," Holden said. "For casinos, sports betting is another way to bring people in the door. ... it's like having a big act come and play."

For months, Ohioans have been subjected to an advertising blitz that blanketed airwaves, social media and billboards throughout the state.

Often, those ads promoted so-called bonuses, or credits, people can simply get for joining a sportsbook or wagering a certain amount of money.

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In Ohio, sportsbooks paid out nearly $320 million in promotional credits to bettors, according to the Ohio Casino Control Commission. But Ohio doesn't allow sportsbooks to deduct those promotional dollars from tax revenue, so those kinds of offers won't last, Holden said.

"Right now, it's such a competitive market for fan acquisition," Holden said. "But those promotional bets don't make a lot of economic sense long-term, so those won't stick around."

Despite being legal for just two months, sports betting has already come under fire from Ohio Gov. Mike DeWine and the commission tasked with oversight.

Along with fines that have been levied against various sportsbooks, the state may try to increase how much it taxes sportsbooks, said Longmeier.

Ohio has a 10% tax on sportsbook revenue. And while more than $1.1 billion in bets were placed in January, sportsbooks brought in $208.9 million in revenue translating to $20.89 million in taxes for Ohio.

DeWine, Longmeier said, has proposed doubling that tax to 20%.

Holden said he wouldn't be surprised if more states look to increase taxes on sports gambling. New York, he said, has the highest tax rate of 51% on sports betting.

Holden also expects sports gambling will face harsher regulation going forward as it becomes legal in more states. Legislation to better control sportsbooks would likely gain bipartisan support, he said.

"I think we will watch them come together against gambling," Holden said of state and federal legislators. "I think everyone is growing a little concerned. If things don't get toned down, in the not-too-distant future we'll see more done."

mfilby@dispatch.com

@MaxFilby

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Betting $1 billion: 5 takeaways from first month of sports gambling