The Kentucky Horse Racing Commission (KHRC) has reported that the state’s online sportsbooks saw a $129.2 million handle in July 2024, marking the lowest monthly total since the state’s regulated sports wagering market launched in September 2023. This decrease represents a 14 percent drop compared to June’s handle of $150.3 million, as Kentucky’s betting market begins to show seasonal fluctuations typical of the industry.
Despite the decline, online sports betting continues to be the dominant mode of wagering in Kentucky. In July, an overwhelming $125.4 million of the total handle was wagered through online platforms, underscoring the growing importance of digital sportsbooks in the state.
FanDuel and DraftKings Continue to Dominate Revenue Generation
FanDuel has maintained its stronghold in Kentucky’s sports betting market, leading in revenue for the fourth consecutive month. In July, FanDuel generated $6.1 million in revenue from $41.2 million in wagers, showcasing the operator’s efficiency in turning a substantial portion of its handle into profit.
Close on its heels, DraftKings reported $5.7 million in revenue from a higher handle of $48 million. While DraftKings handled more wagers than FanDuel, FanDuel’s higher revenue reflects its sharper edge in converting bets into returns, whether through better margins or promotional strategies. The rivalry between these two industry giants continues to shape Kentucky’s betting landscape, as they consistently outperform other licensed operators in the state.
State Revenue and Adjusted Figures Show Slight Decline
Adjusted revenue for July came in at $15.1 million, slightly down from June’s $16.3 million. This decrease in adjusted revenue translated into a modest dip in the tax contributions to the state, with Kentucky earning $2.1 million in July, down from $2.2 million the previous month.
Though these declines are notable, they remain within the expected range for a market that is still relatively new and subject to seasonal trends. The overall performance continues to exceed the state’s initial projections.
Seasonal Trends Impacting Sports Betting Handle
The 14 percent decrease in the handle from June to July aligns with broader seasonal trends typically seen in the sports betting industry. Summer months, especially July, often experience lower betting activity as major sporting events like the NFL and NBA are in their off-seasons. While there are still baseball and other niche sports to wager on, the general lack of marquee sporting events during this time of year is likely contributing to the lower handle.
This seasonal ebb and flow in the sports betting industry is something Kentucky’s market is now experiencing for the first time since its launch in September 2023, which coincided with the busy fall sports calendar. As the NFL and college football seasons approach, it’s expected that the state’s sports betting handle will see a resurgence.
Market Outperformance and Long-Term Growth
Despite the recent dip, Governor Andy Beshear remains optimistic, noting that Kentucky’s sports betting market has “outperformed expectations” since its launch. The total amount wagered since the introduction of legal sports betting stands at an impressive $2.23 billion, underscoring the market’s overall success in engaging bettors across the state.
Licensed Kentucky sports betting operators have collectively generated over $260 million in profit since September 2023, while Kentucky’s tax revenue from sports betting has reached $36.7 million. These figures highlight the long-term value of the sports betting industry to the state, both in terms of operator profits and tax revenue generation for public services.
Online Sports Betting: The Key Driver of Kentucky’s Success
A major factor behind the continued success of Kentucky’s sports betting market is the overwhelming preference for online wagering. In July, nearly 97 percent of all bets placed were made through online sportsbooks, illustrating the convenience and accessibility that digital platforms provide to bettors.
Kentucky’s early embrace of mobile and online betting has proven to be a smart decision, enabling residents to engage with sports betting without needing to visit a physical location. This shift toward digital has not only increased the overall handle but also expanded the state’s betting demographic to include younger and more tech-savvy users.
With mobile sports betting now accounting for the vast majority of wagers, it’s clear that Kentucky’s decision to prioritize online accessibility has been a critical factor in the market’s rapid growth.
FanDuel and DraftKings: The Key Players in Kentucky’s Market
The continued leadership of FanDuel and DraftKings is a significant element of Kentucky’s sports betting market. Together, these two operators accounted for the bulk of the state’s total handle and revenue in July. Both companies are well-established industry leaders across the U.S., and their success in Kentucky mirrors their performance in other states with legal sports betting.
FanDuel, with its $6.1 million in revenue from $41.2 million in wagers, has consistently demonstrated its ability to maximize profitability. Its ability to outperform DraftKings in revenue despite handling fewer bets suggests that FanDuel has fine-tuned its promotional and operational strategies to yield higher returns.
DraftKings, while trailing slightly in revenue, still handled more wagers than any other operator in July. The company’s $48 million handle is a testament to its popularity and broad appeal among Kentucky bettors, even if its revenue conversion did not match FanDuel’s.
Both FanDuel and DraftKings have solidified their positions as the top sportsbooks in Kentucky, but their continued dominance will likely depend on how effectively they can differentiate themselves as competitors, particularly in an increasingly crowded market.
Economic Impact and Tax Revenue Benefits
Since the launch of regulated sports betting in Kentucky, the economic impact on the state has been substantial. Kentucky’s government has reaped the benefits of sports betting through tax revenues, which have now totaled $36.7 million. This influx of funds has been crucial in supporting public services, infrastructure projects, and other state-funded initiatives.
In July alone, sports betting contributed $2.1 million to the state’s coffers, even with the slight decline in handle and revenue compared to June. Governor Beshear has consistently highlighted the positive impact of these funds on the state’s economy, reinforcing the long-term value of maintaining a well-regulated and competitive sports betting market.
What’s Next for Kentucky’s Sports Betting Market?
As Kentucky’s sports betting market approaches its one-year anniversary, it is poised for further growth. The upcoming NFL and college football seasons are expected to drive a significant increase in betting activity, particularly online, as football remains the most popular sport for wagering in the U.S.
Industry analysts are optimistic that the seasonal upswing in fall and winter will offset the slower summer months, potentially pushing Kentucky’s total handle and revenue figures to new highs by the end of 2024. Additionally, the state’s focus on expanding its online betting infrastructure and introducing new operators may further increase competition, leading to better promotions and more engagement from bettors.
Despite the dip in July, Kentucky’s sports betting market remains a major success story, particularly in terms of online wagering. The $2.23 billion in total wagers since September 2023 and the over $260 million in operator profits illustrate the market’s strength, while the state’s $36.7 million in tax revenue showcases the broader economic benefits of legal sports betting.
FanDuel and DraftKings continue to lead the charge, but the market’s seasonal fluctuations highlight the importance of a diversified and competitive ecosystem. With the arrival of the football season, Kentucky’s sports betting industry is likely to regain momentum, setting the stage for further growth in the months ahead.