Indiana Sportsbooks Have Taken A Hit From Ohio, But All Is Not Lost

The year started off tough for Indiana sportsbooks, particularly with the initiation of sports betting in neighboring Ohio on January 1.

Ever since Indiana legalized sports betting in September 2019, substantial changes have occurred. At that point, Indiana was merely one among twelve states that had legal sportsbooks.

Currently, 33 states along with Washington D.C. have functional books, and another four are set to join them soon.

Despite this, the launch in Ohio has had a profound impact on Indiana’s statistics. Since the beginning of the year, Indiana’s sports betting handle has decreased by 11.9%. Conversely, the Ohio market has experienced a considerable surge, accumulating nearly $2.5 billion in betting volume until March.

Some of that money was utilized in Indiana before the start of the new year. Now, just like Hoosiers, Ohio residents can place bets from anywhere within their state.

The impact has been significant, though anticipated. Now that the eastern neighbor has joined the competition, it’s time to look at the current situation of Indiana’s sports betting market.

The number of players in Indiana decreases because of sports betting in Ohio.

Up until April, Indiana’s sportsbooks processed $1.54 billion in wagers. However, the total amount rose to $1.75 billion in 2022.

Two major cities in Ohio, Cincinnati and Dayton, consider Indiana as their nearest neighbor. Their combined metropolitan areas house approximately 2 million people, constituting about one-sixth of Ohio’s total population of 11.9 million.

Indiana, with a population just shy of 7 million, had almost 30% less prospective gamblers compared to western Ohio. However, those residing in Ohio had to deal with the inconvenience of traveling to Indiana to gamble.

Indiana sports betting handle 2023 vs. 2022

	2023	2022	Decline %
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%

Ohio’s launch directly affects Indiana.

Pew Research indicates that approximately 20% of American adults indulged in sports betting between June 2021 and June 2022. While the study didn’t give state-specific data, it’s reasonable to deduce that the proportion is likely higher in states that have legalized betting and lower in states where it is prohibited.

Assuming that the percentage of Western Ohioans gambling in Indiana is roughly 10% or 5%, it can be estimated that about 100,000 to 200,000 Ohioans are placing bets there. Despite geographical distances, some gamblers make the journey to states where betting is legal, such as Illinois and Nevada.

Based on the same metrics, approximately 1.4 million people make up 20% of Indiana’s population. In contrast, Ohio’s population may have represented roughly 10% of Indiana’s total, leading to its lower numbers at the beginning of 2023.

Additional puzzle pieces

At the beginning of the year, Play Indiana predicted that Indiana’s 2023 handle would probably be approximately $4.1 billion. This estimation shows a 9.1% decrease from the $4.5 billion reported in 2022.

Indiana’s revenue has fallen short by about $50 million in the first four months, which is approximately 2.8% less than the estimated figures. Revenue data suggests that the entry of Ohio accounts for 80% to 85% of this decrease.

We can examine the market’s maturity in its fourth year for the remaining 15% to 20%. At this point, most bettors have signed up with Indiana sportsbooks, leading to a decrease in promotional offers for those who have not.

Furthermore, the number of sportsbooks has reached its peak. The most recent one to start up was MaximBet in October 2022, but it shut down in less than two months.

The 2023 revenue figures from Indiana underscore the evolving dynamics of the U.S. sports betting market. Other states, such as Ohio and Kentucky, are recognizing their potential and preparing to join the fray.

Despite states such as Indiana gaining an early advantage, they will ultimately establish their positions in a robust nationwide sports betting economy.

Initial year projections suggest that the Hoosier State is expected to be the 13th ranked state in the U.S, even though it faces growth challenges from Ohio.

The launch in Ohio affects other states.

Even though Indiana experienced a 10% hit from Ohio’s launch, it is still performing better than two of its neighboring states.

From January to April, Michigan witnessed a betting handle of $1.61 billion, representing a 12.1% decrease compared to the previous year, a slightly steeper drop than Indiana. Although Michigan has a population of over 10 million, its total bets surpassed Indiana’s by a mere $70.2 million.

The population of West Virginia, presently at 1.8 million, experienced significant declines due to the loss of the betting pool from southeastern Ohio, which constituted hundreds of thousands. The betting handle of the state, as of March, stood at $134.6 million, marking a 20.4% decrease from the previous year. In no month did it surpass $50 million.

On the other hand, Pennsylvania has succeeded in upholding a certain level of stability. The betting handle of $2.1 billion that was noted through April only experienced a decrease of $10 million year over year, a trivial reduction equating to 0.5%.

Despite having powerful neighbors like New York and New Jersey, Pennsylvania has maintained its position as a top-five market, a feat not achieved by other states.

It’s reasonable that Pennsylvania, also known as the Keystone State with its 13 million inhabitants, could withstand being surpassed by Ohio when other adjacent states couldn’t. This is despite Ohio’s projected rise to become the sixth largest state in the U.S. this year.