Kentucky entered the legal sports betting market in September 2023, launching both retail and online platforms. This launch was highly anticipated, and in its first year, the online betting volume reached $23 billion, with an adjusted gross revenue of $264.3 million, showing significant growth.
Launch of Legal Sports Betting in Kentucky
Kentucky officially entered the sports betting market on September 7, 2023, with the launch of its retail sports betting platform. Three weeks later, the online betting platform went live on September 28, allowing residents to easily place bets from home.
In the first year, Kentucky's online platform saw a total betting volume of $23 billion, highlighting the growth trend in the US online gambling sector, with Kentucky being no exception. The adjusted gross revenue (AGR) for Kentucky's online gambling in its first year was $264.3 million.
Major Operators in Kentucky.
Flutter Entertainment's FanDuel took a leading position in Kentucky's online gambling market. In the first year, FanDuel generated $105.9 million in adjusted gross revenue from a betting volume of $8.17 billion, with a hold percentage of 12.96%, one of the highest in the state.
FanDuel's long-time competitor DraftKings followed closely, earning $100.9 million in revenue. Despite a larger betting volume of $8.95 billion, DraftKings had a slightly lower hold percentage of 11.27%, making the competition fierce and close.
BetMGM also posted impressive figures, earning $18.9 million in revenue from a betting volume of $1.436 billion, with a hold percentage of 13.16%, ranking high among major operators.
Bet365 and ESPN Bet also made significant contributions to Kentucky's gambling market. Bet365 earned $13.5 million in revenue from $1.573 billion in bets, while ESPN Bet earned $10.6 million from $1.043 billion in bets.
In the retail sector, Churchill Downs and its partner Kambi were at the forefront, earning $2.5 million in revenue from $351 million in bets, with a hold percentage of 7.06%, making it Kentucky's top retail sports betting. Turfway Park was second in the retail sector, with a betting volume of $147 million and revenue of $920,800, with a hold percentage of 6.25%.
Tax Contributions
The online gambling sector brought in a total of $37.7 million in tax revenue for Kentucky. Although the betting volume for retail gambling was much lower than online gambling, it still contributed $756,517 in tax revenue. Despite being less compared to online gambling, it still made a contribution to the overall tax revenue from sports betting.
The total betting volume in August 2024 increased by 17.1% compared to July, reaching $1.514 billion, with $1.47 billion from online betting, further indicating the dominance of online platforms.
Despite the increase in betting volume, the adjusted gross revenue decreased from $15.1 million in July to $11.8 million in August, a decline of 21.9%, highlighting the monthly volatility in sports betting operations.
