Thanks to after-hours negotiation and some hand-wringing, Indiana’s state legislature in early May passed a broad gambling bill that legalized sports wagering within it. The result is one of the most free-market, consumer-friendly legal sports betting jurisdictions in the U.S., now in the early days of implementation of a model most akin to New Jersey’s, which has stamped itself as the East Coast sports betting leader.
New Jersey is also where DraftKings planted its flag as an actual sportsbook, after earlier speculation about the daily fantasy sports leader’s potential bifurcation into a DFS and sportsbook operator. In New Jersey in August 2018, DraftKings became the first legal mobile/online sportsbook to launch in any state outside Nevada, and quickly emerged as one of the market leaders, alongside fellow DFS competitor, FanDuel.
Pennsylvania and its 12 mm total population is DraftKings’ pending next frontier (the company recently gained access through a partnership with The Meadows). Every other month, give or take, there’s a new state opening for sportsbook operators, the main obstacle in most cases market access. But DraftKings has been fortunate to find those inroads, at least in part due to early success.
“There are millions of people across the country who have always wanted but never had access to a safe, legal sportsbook, and that’s changing all over the map.” Jamie Shea, DraftKings‘ head of sportsbook digital, told Hoosier State Bets. “It’s exciting, and we’re embracing the opportunity to give sports fans in Indiana and other new jurisdictions a top-notch sportsbook experience with scores of player and game props, in-game wagering, pools, all sorts of features that players are seeking.”
Indiana sports betting numbers and neighbors
https://twitter.com/brianpempus/status/1182295816490377216
In September, the first month of legal sports betting in Indiana, 10 different brick-and-mortar sportsbooks across the state combined for a $35.2 mm betting handle, producing $8.56 mm in adjusted gross revenue and over $800k for the state based on a 9.5% tax rate.
Bettors placed more than half of that, $20.7 mm on football contests, both NFL and college. The October numbers, to be released in November, probably will reveal a doubling of the handle figures, if not more, with the addition of the online component, so far headlined by DraftKings and BetRivers, which became Indiana’s first online sportsbook in a launch earlier on Oct. 3. DK Sportsbook launched later on the same day.
Many more will follow in Indiana, including sooner than later FanDuel Sportsbook, Caesars Sportsbook, probably FOX Bet at some point, and new faces including the exchange wagering platform Smarkets, through a partnership with the Rising Star Casino Resort.
But Shea said the scope and strength of competition will not change DraftKings’ approach.
“The goal in any and every state will be to offer a complete sportsbook, focus on creating a fast, reliable app and a great user experience,” said Shea, a veteran of several Nevada casinos and sportsbooks. “We view competition as healthy and ultimately good for the consumer, so we welcome it. The depth and size of competition will vary state by state, but our approach and goals will remain the same.”
One benefit for all Indiana sportsbooks, brick-and-mortar and online, is the sluggishness of surrounding states, one of which has legalized sports wagering (Illinois) but is stuck in the mud. Also, each of its other three bordering states — Michigan, Ohio, and Kentucky — have had substantial conversation about legalization but have yet to coalesce around a bill or reach the finish line. (Michigan did have an enabling law pass last December, only to see it vetoed by the former governor).
Lawmakers in other states have taken notice.
“Casinos are moving forward because they know it’s going to come to fruition at some point,” Michigan Rep. Brandt Iden told the Detroit Free Press in September. “If we don’t do this, we will continue to lose consumers to other states, just like you lost me to Indiana last weekend,” referencing his trip to a casino one mile over the Michigan border into Indiana to place three football bets.
“I anticipate we’ll see the same sort of thing [in Indiana] — people visiting from across state borders, whether it’s at a rest stop to log-in online and back home or to visit a physical sportsbook. People just want the opportunity to bet legally,” Shea said. “I think Indiana has taken the right approach with its enabling law and regulations, creating a robust and consumer-friendly market where people can access sportsbooks the way they’ve already been doing it — on their phones — and also have the convenience of signing up remotely.
“Some neighboring states such as Ohio are moving in the direction of legalization and I think the reception for legal sports betting in Indiana, from Indianians and residents of the others states, may spur them to get moving as well.”
Local flavors and players
As in other states, DraftKings has appealed to local sports fans with certain odds boosts, pricing and proposition wagers.
“For example, last week when the Colts upset the Chiefs in Kansas City, we put the odds at 10/1 for a straight up win when elsewhere the moneyline was actually around 4.5/1,” Shea explained. “A lot of people took advantage of that one and made out nicely. So there will be similar promotions of that kind focusing on home teams and big games, and we’ll be creative.”
DraftKings’ licensing partner in Indiana is the Ameristar Casino in East Chicago, located less than 10 miles from Illinois and of course southeast of Chicago, as the name implies.
Right now the physical sportsbook at the Ameristar is a nondescript, unbranded space dubbed “Sportsbook,” with the betting menu and systems technology powered by the supplier Kambi, which is also a DraftKings partner. Asked whether the book would become a DraftKings-branded sportsbook, like the one in Atlantic City, New Jersey, Shea said it hadn’t been sorted out and declined to speculate.
The Ameristar in September saw $5.4 mm handle, second only to the nearly $9 mm handled by Horseshoe Hammond, which is located less than a five-minute drive from the Illinois border.
Regardless of the banner hung in East Chicago, the opportunity for DraftKings to serve bettors throughout Indiana, and the country as a whole, is vast, as more and more legal states light up.
“It’s a moment I’ve been waiting for my whole career,” Shea said. “It’s incredible.”
