Indiana sportsbooks have seen an 11% decrease in action through the halfway point of 2023, with every month bringing year-over-year drops in betting volume.
However, 2023’s total handle exceeds $2 billion, and revenue is up 18% YoY, totaling $189.1 million.
Indiana’s drop in betting volume comes as each of its four neighboring states has legalized sports betting. Ohio sportsbooks went live on January 1, 2023, and Kentucky will become the final domino to fall when its sportsbooks open in September.
Still, the Indiana sports betting market remains healthy as it matures and settles into a “new normal.”
How other states affected Indiana’s launch
Indiana got a head start over its neighbors and most of the country by legalizing sports betting in 2019. Its first sportsbooks launched in September of that year.
Illinois (March 2020) and Michigan (January 2021) followed, but their launches were still within Indiana’s infancy, especially given the COVID-19 pandemic in 2020. All three states were ahead of the curve, opening their doors as the markets blew up nationwide.
Ohio’s launch rained on Indiana and Michigan’s parade, likely accounting for 80% to 85% of Indiana’s 11% decline in handle. Michigan’s handle has fallen by 13% through June.
On the other hand, Illinois’ market has remained unaffected. Its growth has continued in 2023, and it will be a top-three market this year.
Will Kentucky spoil projections?
Ohio’s sports betting launch resulted in PlayIndiana projecting sports betting handle to fall in 2023 to $4.1 billion from $4.5 billion in 2022. It is 49.8% of the way to that mark, facing two more slow months of data before football season arrives in September.
Sports betting revenue is outperforming its $342 million projection, down from $375 million in 2022. At this pace, YoY revenue will grow as it has every year since sports betting became legal in Indiana.
Of course, Kentucky will have legal sports betting in time for football season, meaning Indiana sportsbooks will effectively lose the Louisville market of more than 600,000 residents.
Kentucky won’t have the same effect as Ohio did on Indiana’s numbers, but it could poach enough business to veer Indiana’s course off the projected path.
What next year looks like for Indiana sports betting
Indiana will have its first calendar year with sports betting competition from all sides in 2024. The market will likely level off at around $4 billion in volume and $350 million in Indiana sports betting revenue, leading to $35 million in taxes.
Those numbers would put Indiana into the same ballpark as states like Maryland, Michigan and Tennessee, just outside the top 10 nationwide. Having launched mobile sports betting last November, Maryland has the best chance to finish at the front of the pack, while Tennessee will take a minor hit from Kentucky’s launch and bring up the rear.
This leaves Michigan and Indiana in a friendly rivalry for 12th and 13th places.
Is 2024 the year for online casinos?
Regardless of the outcome, Michigan has an undeniable edge in another arena: online casinos. Its online casino industry has grown to rival New Jersey and Pennsylvania, bringing in $150 million in revenue for four consecutive months and growing by 24% YoY in June.
And Indiana legislators are starting to pay attention to these eye-popping numbers from states like their northern neighbor. At last month’s National Council of Legislators from Gaming States 2023 Summer Meeting, Light & Wonder’s Howard Glaser mentioned Indiana on a list of five candidates to legalize online casinos in 2024.
- New York
Rhode Island recently became the seventh state to legalize online casinos, showing that momentum is growing toward a tipping point that will mirror sports betting in 2021.
And, like sports betting, Indiana has a chance to be at the forefront of online casino gaming. Other states have provided a roadmap to success, and it will add a new and even more significant revenue stream for the state.
If it happens, Indiana will have another “new normal.”