The new regulated sports betting industry in West Virginia has got off to a flying start as revenue quickly surged past the $9 million mark. Hollywood Casino opened its doors in the state’s western panhandle on August 30 and since then has taken $9.1 million worth of sports bets. The company enjoys a virtual monopoly in the state, as the only other sportsbook is located at the Greenbrier, an exclusive private resort where memberships start at $1,749 per year. Yet Hollywood Casino’s impressive performance shows just how much scope there is for a strong legal betting industry in the Mountain State.
The sports betting income has grown on a weekly basis: in week one it took $457,788, then $1,104,008 in week two, $1,713,845 in week three, $1,829,347 in week four, $1,875,615 in week five and $2,110,500 in week six (October 6-12). During that time, the casino – owned by Penn National, with William Hill running the sportsbook – has held revenue of $2,298,733 on sports betting. The state takes a 10% revenue tax, giving it $229,873 to reinvest in public services.
Eyes on the Prize
The Greenbrier’s sportsbook, run by FanDuel, has not been as lucrative, but that is to be expected. The resort is owned by the family of West Virginia governor Jim Justice and it does not receive a great deal of footfall due to the high membership fees it charges. In four weeks since launch, it has taken wagers worth $447,094, keeping a revenue figure of $75,697 and leaving just $7,570 in tax for the state. But the land-based sportsbook is a minor concern for FanDuel, owned by Paddy Power Betfair. It has its eyes on the far bigger prize of offering online and mobile sports wagering to residents of the Mountain State.
West Virginia is a rural state and many residents are not close to the casinos, so online sports betting is likely to be huge. Online operators need to be tied to a physical casino, and William Hill and Paddy Power Betfair moved quickly to gain a foothold in the state. The framework is in place for online sports betting in West Virginia and it has appointed GeoComply to provide geolocation services that ensure operators will only target people within the state’s boundaries. Hollywood Casino has promised that it is just a couple of weeks away from launching a West Virginia facing app, and FanDuel should be close behind.
That should cause a far greater explosion in regulated sports betting’s popularity across West Virginia and the handle is expected to soar going forwards. The state estimates that it will make $13 million to $18 million per year from regulated sports betting. It takes a 10% tax of the revenue, so assumes West Virginian sportsbooks will enjoy revenue of $130 million to $180 million. That would be an impressive industry for a state with a population of just 1.8 million people, and ranked 48th out of 50 US states when it comes to median income.
DC Looks on Enviously
The sizeable sums on offer have sparked the District of Columbia into action, as it does not want to see its residents continually leaving the nation’s capital to spend their money in West Virginia. Washington Top News reported optimism and a sense of urgency at a hearing this week, which discussed a bill to introduce sports wagering in the D.C. Proponents hope to beat Virginia and Maryland to the market, and they spoke positively about making progress, while representatives of FanDuel, MGM and DraftKings talked up the economic benefits of a regulated industry.
“Sports betting is going to happen and I believe we should act before our neighboring jurisdictions,” said councilman Jack Evans. “You can see the cluster around us [Delaware, New Jersey, Pennsylvania and West Virginia have all legalised sports betting] – it’s my view that over the course of the next several years sports betting will be across the country.”
Bringing Revenues Onshore
DraftKings’ Griffin Finan told the assembled lawmakers that his firm estimates that around 130,000 D.C. residents bet $319 million per year at unregulated, offshore sites. “We are positioned to market to these people on day one,” he said, explaining how much the district stands to gain in taxes by rolling out a legal industry. The bill seeks to permit online and land-based gambling, regulated by the D.C. Lottery. There is some debate over the number of licenses that should be dished out, while some opponents branded sports betting a “regressive tax on low income residents”, but the overall mood seemed to be in favour of offering a legal market.
The major sports leagues have asked for a cut of sportsbooks’ revenue and this has caused tensions to flare up at industry events. West Virginia has resisted pleas to pay out a portion of its winnings to the leagues, and there appears to be little appetite for it among operators, who are the ones that have to take all the risks and jump through the various regulatory hoops. The industry-funded American Gaming Association has commissioned a Nielsen study that estimates the sports leagues will rake in a combined $4.2 billion per year as a result of sports betting, without taking a cut of revenue.
Most of that will come indirectly from increased fan engagement, Nielsen reported after surveying more than 1,000 sports fans across America. All participants in the survey identified as gamblers and they answered questions about how a national legal market would affect their sporting engagement habits. Nielsen believes $3.3 billion could be generated by fans being drawn into stadiums by the appeal of placing bets and watching games. That would allow the franchises to sell more tickets, refreshments and merchandise, plus boost media rights.
The study suggests that another $596 million would come as a result of TV revenues being boosted by sportsbooks advertising, while $267 million would come as a result of sponsorship deals with the sports betting industry and $89 million from data and video revenue. Nielsen caveated its findings by explaining the market would need to include at least 100 million people for the leagues to fully benefit, attempting to bolster the AGA’s calls for a widespread regulated market across the US.
Kristian heads up the content and SEO team at Digital Fuel having worked in digital marketing for ten years. He’s as passionate about creative content as he is about Brighton & Hove Albion FC and when he’s not following football he’s writing about Brighton’s bustling pub scene