Sports betting in Ohio became legal on the opening seconds of 2023.
Projections called for Ohio to open strong, but not many would have expected a $1.1 billion first month of handle.
The opening month made it clear that Ohio is going to be a major player nationally in the sports betting industry.
What does Ohio’s strong start mean for Michigan’s sports betting status, which is currently at a plateau?
Ohio sports betting handle second nationally in January
The US currently has several big sports betting markets.
In January, Ohio’s first month managed to push it to second in the country for handle.
Its $1.11 billion total put it ahead of New Jersey (1.08 billion), Nevada ($935.8 million) and Pennsylvania ($772.3 million).
It more than doubled Michigan’s total of $490.9 million in handle.
Overall, Ohio accounted for 12% of the nationwide sports betting share.
How Ohio may have impacted Michigan sports betting
While Ohio launching shouldn’t have much impact on Michigan, we did see a notable trend for this state, as well as Indiana.
January tends to be a chance at record numbers for sports betting.
The biggest month on record for Michigan sports betting came in January of 2022 when it brought in $532.7 million in handle. Indiana’s peak month was also January of 2022 when it had $500.1 million in total handle.
However, both states saw a decline in handle from December 2022 to January 2023. Each had a slight 1% dip while most states grew around 5%.
Michigan went from $494.8 million in December to January’s $490.9 million mark.
Indiana went from $431.4 million in December to January’s total handle of $427.2 million.
The year-over-year drops, however, were 14.5% in Indiana, and 7.8% in Michigan. How much of that had to do with Ohio bettors not crossing the borders to place bets is unknown.
Ohio also offers some sportsbooks that Michigan does not. Some Michigan sports bettors may have elected to take advantage of new sign up offers and crossed into Ohio in January.
Michigan sports betting leveling off
As this past football season progressed, Michigan seemed to hit a plateau for sports betting handle.
Retail numbers continue to slide, while online sports betting has seen its first signs of dipping year-over-year in handle.
Both December ($484.6 million in 2021 to $478.7 million in 2022) and January ($496.8 million in 2022 to $475.6 million in 2023) saw drops in online handle.
While the handle is taking a slight dip, sports betting revenue is actually growing.
The 2022 year ended with Michigan earning at least $50 million in sports betting revenue for three of the final four months. All four exceeded at least $42 million.
Prior to September of 2022, Michigan had only exceeded $50 million in sports betting revenue one time. That was in November of 2021 when it had a record of $58.8 million.
January of 2023 saw just $33.8 million in sports betting revenue. That could be reflective of Ohio’s impact as well, but is a number that shouldn’t be concerning. Any defecting Michigan players to Ohio should be returning to the state in February and March’s revenue reports.
What can we expect from Ohio sports betting
Ohio’s debut month certainly outperformed expectations.
For 2023, Ohio originally was projected to collect $8 billion in wagers.
Following January’s opening, PlayUSA senior analyst Eric Ramsey says the Ohio market could be up to 25% larger in the first year. Should that happen, Ohio could be looking at $10 billion in sports bets for 2023.
“Everyone had big expectations for Ohio heading into launch, but this early performance is outpacing even the most optimistic forecasts,” Ramsey told PlayOhio. “There’s a real possibility that it could end up as the second largest sports betting state behind New York this year, likely positioned ahead of larger and more mature states like Illinois and Pennsylvania.”
With February being a shorter month, Ramsey still sees Ohio approaching $1 billion in handle. That would be about a 10% dip, while most states will see a 20-25% drop.