Kansas Posts Solid Numbers in First Year

The state of Kansas just marked their one-year anniversary in legalized sports betting. The 12-month totals are pretty amazing given that there were just four brick-and-mortar books and six mobile ones. Operators took bets totaling $1.85 billion and made $166.4 million in gross income, giving them a 9 percent hold. As operators are permitted to deduct promotional play and carry over monthly losses in order to arrive at adjusted gross income, the state received close to $7 million in tax revenue.

DraftKings, FanDuel, and BetMGM can typically advertise their huge financial resources in states where operators can aggressively provide promotional incentives. In Kansas, the three mobile alternatives contributed for 92.5 percent of the almost $91.8 million in credits given to the betting public from September through August.

Among the six mobile providers, DraftKings had the highest handle ($753.5 million) and gross revenue ($67.8 million), as well as the highest promotional expenditure at around $38.7 million. FanDuel came in second in terms of spending with $25.3 million, but that sum is also less than half of its overall earnings of $56.1 million. As its promotional expenditure of $20.9 million nearly matched its reported gross revenue of $21.9 million, BetMGM was eager to pay the price to be the undisputed No. 3 option in Kansas.

In Year 2, it will be interesting to follow the rebranding efforts of two mobile bookies, with Fanatics taking over PointsBet and PENN Entertainment changing from Barstool Sportsbook to ESPN BET. In addition to perhaps increasing promotional play, PENN can use Kansas Speedway’s top retail sportsbook to continue competing against Caesars Sports for the No. 4 place in the state. Fanatics faces a more difficult road ahead because PointsBet only made up 1.2 percent of mobile handling, but they also had the lowest promotional expenditure of the group at $1.2 million.

FanDuel had a 10.4% overall hold over the past year, which was the highest among the six mobile books. Four out of the twelve months saw public holdings of FanDuel fall below that 10% level, matching the events in New York, Illinois, Pennsylvania, Virginia, Michigan, Indiana, and Iowa over the same period.

Even with the switch from Barstool to ESPN, PENN shouldn’t have any issue keeping a firm hold on the brick-and-mortar handle share. In the first 12 months of betting in Kansas, the Kansas Speedway location generated 76 percent of the $81.2 million handle and nearly 70 percent of the $4.6 million in total income.

Additionally, in February, when it recorded payouts of more than $1.8 million above the $8.2 million in accepted bets, it suffered the most loss of any sportsbook, whether it be retail or mobile, due in large part to the Chiefs winning the Super Bowl. PENN recovered from that deficit in just three months, but during the first eight months of the year, it has only maintained a hold of 2.4 percent, taking in $845,000 from a $34.9 million handle.