The start of the year has been a challenge for Indiana sportsbooks, namely with the launch of sports betting in neighboring Ohio on Jan. 1.
But a lot has changed since sports betting in Indiana became legal in September of 2019. At that time, Indiana was one of just 12 states with legal sportsbooks.
Now, 33 states plus Washington D.C. have operational books, with four more soon to join.
However, no single state’s launch has affected Indiana’s numbers like Ohio. Indiana sports betting handle is down 11.9% since the start of the year, while Ohio’s market has erupted with nearly $2.5 billion in betting volume through March.
Before the new year, some of that money went across state lines to Indiana. Now, Ohioans can place bets from anywhere inside their home state, just like Hoosiers.
The effect has been pronounced, but expected. Let’s examine what the Indiana sports betting market is going through now that its neighbor to the east has joined the market.
Ohio sports betting cuts into Indiana’s player pool
Indiana’s sportsbooks have handled $1.54 billion in wagers through April. That total was $1.75 billion in 2022.
Two of Ohio’s largest cities, Cincinnati and Dayton, call Indiana their closest neighbor. Their metropolitan areas account for around 2 million residents, roughly one-sixth of Ohio’s 11.9 million population.
Just under 7 million people live in Indiana, meaning western Ohio added almost 30% more prospective bettors. Of course, Ohioans needed to travel to Indiana before betting, which added a barrier to entry.
Indiana sports betting handle 2023 vs. 2022
|January||$427.2 million||$500.1 million||-15.6%
|February||$356.2 million||$409.1 million||-12.9%
|March||$433 million||$476.8 million||-9.8%
|April||$321.4 million||$360 million||-10.7%
|Overall||$1.54 billion||$1.75 billion||-10.9%|
Indiana directly affected by Ohio’s launch
According to Pew Research, roughly one in five U.S. adults engaged in sports betting between June 2021 and June 2022. The study did not provide data on individual states, but that percentage is presumably higher in legal betting states and lower in states where betting is illegal.
Let’s say the number of western Ohioans who went to Indiana to place bets was more like one in 10 or one in 20, putting us around 100,000 to 200,000 Ohioans betting in Indiana. Even with traveling, some bettors take trips to other states with legal betting, such as Illinois or Nevada.
By those same measures, 20% of Indiana’s population equals around 1.4 million. Comparing the two, Ohio likely accounted for about 10% of Indiana’s handle and is the main contributor to its lower numbers to start 2023.
More pieces of the puzzle
PlayIndiana projected Indiana’s 2023 handle at around $4.1 billion at the start of the year, down 9.1% from $4.5 billion in 2022.
Through four months, Indiana’s handle sits $50 million below projections, about 2.8% worse than expected. Looking at the revenue numbers, Ohio’s launch looks to explain 80% to 85% of Indiana’s decline.
As for the remaining 15% to 20%, we can look toward the market’s maturity in its fourth year. By now, most bettors have already signed up for Indiana sportsbooks, and fewer promotions exist for those who haven’t.
Additionally, the number of sportsbooks has hit its ceiling. The last operator to launch was MaximBet in October 2022, and it closed its doors less than two months later.
Indiana’s 2023 revenue is more a representation of the shape the U.S. sports betting market is taking. Other states are also reaching maturity, while more continue to enter the landscape, like Ohio and soon Kentucky.
Still, states like Indiana will eventually find their places in a healthy nationwide sports betting economy, even if they have benefitted from an early head start.
Based on start-of-year projections, the Hoosier State will finish 13th in the U.S. even with Ohio dealing a setback to its growth for now.
Other states affected by Ohio launch
Despite Indiana’s 10% hit from Ohio’s launch, it is faring better than two other border states.
Through April, Michigan’s $1.61 billion handle is down 12.1% YoY, slightly worse than Indiana percentage-wise. Its total wagers exceed Indiana by only $70.2 million, despite having a population above 10 million.
West Virginia (1.8 million population) saw the steepest drops from losing southeastern Ohio’s betting pool — in the hundreds of thousands. Through March, its $134.6 million handle is down 20.4% YoY without a month above $50 million.
Pennsylvania, on the other hand, has remained relatively stable. Its $2.1 billion handle through April is down just $10 million YoY (-0.5%).
Unlike the other states, Pennsylvania has remained a top-five market amidst neighboring powerhouses like New York and New Jersey.
While Ohio will push Pennsylvania into sixth in the U.S. this year, it makes perfect sense why the Keystone State and its 13 million residents otherwise weathered the Ohio storm when other border states did not.