According to the Kentucky Horse Racing Commission (KHRC), the state's sportsbooks received $2.3 billion in bets and generated $37 million in tax revenue across their first year of operation. Not only is this a whopping 60% increase over initial predictions for tax revenue, but it is also proof of how popular sports betting has become in the Bluegrass state.
Besides, this is nothing but a huge success, considering that this is Kentucky's first year in sports betting. When sports betting got legalized in Kentucky, this level of success wasn't what the state officials expected. Early projections hinted that Kentucky would receive $23 million in taxes from sports betting in its first year.
However, after seeing $2.3 billion in bets placed and an estimated $285 million in gross gaming revenue, the state blew past that goal. Kentucky easily got to $37 million in tax revenue, accounting for 14.25% tax on the money made—far above anyone's expectations.
Similar to what operates in much of the gambling market across the U.S., two big names—DraftKings and FanDuel were the top players in Kentucky. DraftKings was at the top, making the most money in bets, with $78 million more than its closest rival in second place, FanDuel.
DraftKings made $895 million in wagers while FanDuel pooled $817 million. When it came to generating revenue, though, FanDuel was ahead with FanDuel generating $106 million, while DraftKings made a little less at $100.8 million.
While FanDuel and DraftKings took over the market, other sportsbooks played a vital role in Kentucky's betting market. Here's how they all performed in terms of handle:
DraftKings: $895 million
FanDuel: $817 million
bet365: $157 million
BetMGM: $144 million
Caesars: $118 million
ESPN Bet: $104 million
Fanatics: $52 million
Circa: $4.3 million
Among these smaller operators, bet365 stood out by securing the third-largest handle at $157 million. This is significant progress, especially for bet365, considering that they're not as popular as DraftKings and FanDuel in the U.S. They most likely pushed hard and worked more on their advertisement and promotional offers just like they did in Ohio to bring in more customers and move up the ranks.
Retail sportsbooks in Kentucky, where people can go in and bet in person, also brought in tolerable amounts of money even though most betting actions took place online. Kentucky's retail sportsbooks generated $7.8 million in revenue, contributed to the state a total of $756,000 in tax revenue, and received $87 million.
Churchill Downs, popularly known for its horse racing, made the top list with $35 million in bets booked. Caesars Sportsbook at Red Mile came close second with $22.3 million in handle, while Kambi-powered sportsbooks in Turfway Park came third place with $14.7 million made.
The first year of Kentucky's sports betting market had a perfect head start and did better than everyone's predictions. DraftKings and FanDuel, performed particularly well, bringing hundreds of millions into bets. At the same time, other sportsbooks like bet365, BetMGM, and Caesars are ramping up their reputation in the Bluegrass State, too.
With Circa Sports only launching in May 2024, Kentucky could see even more growth in its second year. As more people get comfortable with placing bets, and with the possibility of more sportsbooks joining the market, Kentucky’s sports betting industry is likely to continue growing.
With the good start Kentucky's sports betting industry has, the future looks bright. This first year has proved that there's a high rise in demand for sports bets. With such numbers, sportsbooks will find new ways to engage bettors and fans, bringing in more promotions, exclusive offers, and more betting options.
As for the states, more tax revenue can be used for projects and public service funding. With the success of the finest year behind them, Kentucky’s sportsbooks, bettors, and the state can look forward to even bigger numbers in the years to come.