September Sports Betting Index (SBI)

In the chart below, we present our RubinBrown Sports Betting Index (SBI). The SBI is based on our proprietary index of the leading sports betting states in the U.S. To continue to best reflect current market conditions, we’ll occasionally adjust the components of the index. To better compare competitive conditions, our index numbers focus in on a group of mature, competitive states. Therefore, a state with an index score of 1.15 had a raw index score of 15% greater than the average, while a 0.90 index score shows a 10% lower than average result.

LEARN MORE ABOUT THE RUBINBROWN SBI

We note the kickoff of the football season shows a relative bump up in performance. The inherent benefit of creating index numbers and the SBI is that we can more realistically compare how the industry was doing in say March and compare it to September.

With the highest relative performance of the SBI seen in the states reporting data so far, it appears we may be witnessing the beginning of another growth phase for sports betting in its leading markets.

In the mature competitive markets, we see growing relative strength in the kickoff to the football season across most jurisdictions. Markets that were seeing weakening such as Iowa and New Jersey found renewed interest and betting volumes in September.

For our internal analysis and work we have done with clients, we created a variety of groupings to track performance. When discussing market conditions with existing and prospective participants, we note that no two states operate under the same exact conditions.

By creating unique groupings of otherwise unconnected markets, we uncover different trends and relative performance levels that better identify which factors may be driving the differences between jurisdictions.

Industry Insights

We plan to share insights we take away from this data with each newsletter, for this first edition we thought we would share a few things that caught our attention:

• Despite expectations that the opening of New York over a year ago would greatly impact New Jersey, the Garden State’s sports betting business continues to thrive and appears to be regaining strength in recent months. In the same timeframe, New York appears to be holding steady, so it would appear there is growing interest in sports betting in this region.
• Four larger states with mature offerings and legal online casino offerings are consistently performing at below average levels: Connecticut, Michigan, Pennsylvania, and West Virginia. While we can’t say for sure why online casino so highly impacts sports betting, it’s a factor that probably needs further research. One might have expected Illinois to struggle to grow its relative volume with so many gaming options available, including VGTs in most municipalities and new casinos opening across the state, but it appears patron’s appetite for sports betting is growing.
• Other Midwestern states and Tennessee appear to be losing steam as these markets mature. Michigan, Indiana, and even newcomer Ohio appear to be seeing weaker index results over the last six months. Some of this could be economy related, but also might reflect how sports betting hasn’t really changed the casino industry. While most casinos in the region embraced live retail sports betting, retail volumes have been weak. As a result, casino operators could be de-emphasizing sports betting and that could be impacting handle across the region.
• While Arizona is leveling off a bit as their operations mature, we call attention to their February index result, the biggest outlier we’ve seen. Arizona hosted the Super Bowl which probably provided a big boost to sports betting. With Las Vegas hosting the Super Bowl in a few months, this may indicate that Nevada could see a significant bump in sports betting revenues and perhaps all gaming revenues as Arizona’s strong month was likely driven by non-residents betting on the game while visiting the Grand Canyon State.

Published: 12/19/2023

_{^{Readers should not act upon information presented without individual professional consultation.}}

_{^{Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.}}