KY Sports Betting Handle Drops Below $250M for First Time Since Launch

The Kentucky Horse Racing Commission reported online sports betting handle of $198.5 million in February, a sharp decline from January’s total of $246 million in wagers. In total, Kentucky picked up $208.4 million in wagers in February. Kentucky’s online sports betting operators combined to generate $20.7 million in revenue for the state, producing $3 million in tax receipts.

The retail sector brought in close to $10 million in betting handle. Total taxable gross revenue stood at $722,390, which brought in $70,433 in excise tax to the state of Kentucky from the retail sector.

Kentucky defines adjusted gross revenue (AGR) as the sum of settled wagers on all events minus winnings and excise taxes paid according to federal law. The state mentions excise tax as tax calculated from AGR at 9.75% for retail locations and 14.25% from online betting.

DraftKings Outpaces FanDuel in Kentucky

DraftKings (DraftKings 39,28 +3,37%) led the state in betting handle, with $78.8 million. After paying out winnings of $70.2 million, DraftKings generated $8.3 million in gross revenue, which helped contribute $1.2 million in tax to Kentucky.

FanDuel (Flutter Entertainment 25,39 +0,12%) was not too far behind though, with $66 million in handle. Of that, 58.2 million was paid back to patrons, leaving FanDuel with adjusted gross revenue of $7.7 million. FanDuel paid $1.1 million in tax to the state.

Caesars Sportsbook (stock_quote symbol=”CZR”]) claimed the third spot in Kentucky with $17 million in handle. After paying out $12.1 million in winnings, the company’s adjusted gross revenue stood at $2.1 million. Total excise duty for Caesars in February was $302,373.

Bet365 had another impressive display in an American-dominated sportsbook state. The sportsbook, based in the UK, generated $13.1 million in wagers and AGR of $965,203. In total, bet365 paid out $137,541 in tax to Kentucky.

BetMGM and ESPN BET had similar output in February. ESPN BET picked up $9.9 million, well below January total of $15.7 million. Total AGR for the company was $757,782 with $107,984 paid in excise tax to Kentucky. BetMGM’s figures were almost the same, with handle of $9.1 million, AGR of $753,465, and tax payment of $107,369.

Fanatics had the worst handle among the seven online betting operators, with wagers of $4.45 million. After paying back $4.3 million to customers, Fanatics had a small profit of $125,359. Total excise tax paid by Fanatics was $17,864.

Churchill Downs, Red Mile Dominate Retail Handle

The retail location at Churchill Downs picked up $3.2 million in handle with AGR of just $61.977. Total tax paid was just $6,043. Hold rate in February was significantly lower than January’s, in which Churchill Downs collected close to $300,000 in revenue from handle of $3.46 million.

Red Mile had the highest handle in the state at a brick-and-mortar location, collecting $3.4 million. Total AGR stood at close to $750,000 with tax payment of $73,069. Turfway Park was taken for a loss of $100,000 after collecting $1.78 million and paying out $1.86 million.

Slow February After Rapid Start To 2024

February’s Kentucky sports betting metrics were down across the board compared to a profitable January, in which the state collected $246 million in handle. Adjusted gross revenue in January was $36.4 million with more than $5 million collected in tax receipts. Even retail locations contributed with $11 million in sports betting handle.

Kentucky does not have a long history in sports betting like other states. Sports wagering has been available in the state since Sept. 2023, but the state’s betting appetite was clear from the outset. In its first full month, Kentucky collected $296 million in October last year.

Overall, in 2023, Kentucky generated $886.1 million in betting handle. At a hold rate of 12.4%, revenue crossed $100 million, which picked up $15.6 million in tax revenue. Since launch, February has been the first full month with sports betting handle below $250 million, another indicator of the state’s promising outlook.

Like most other states, February witnessed a betting slowdown with the NFL being in its offseason, apart from the Super Bowl. Also like most other states, Kentucky is expected to bounce back quickly in March, plausibly with sports betting handle in excess of $250 million.

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