Conversion corner: Getting a handle on US sports betting hold
Chalkline CEO Daniel Kustelski examines trends in customer acquisition through operator hold and handle to assess potential future tools for the sector
Handle and hold by state
- New York: New York launched online betting in early 2022 and already accounts for 10% of the total gross gaming revenue (GGR) earned in the US since PASPA was repealed in 2018. The launch of New York was notorious for the excessive bonusing for the first few months. In fact, 11 months later, New York has proposed a bill to reduce predatory bonusing. Nonetheless, the figures out of New York are impressive.
- Iowa: One pattern we see is that those states that have had sports betting for three years or more have seen a reduction in handle during the football season. In one of those states, Iowa, we see reductions in handle from 2021 to 2022 that are in line with many of the other states that have had sports betting for more than a couple of years. New Jersey, the state that was first to legalize betting after PASPA, is in a similar situation.
- Colorado: Colorado has seen margin increases in handle of 10% but an over-indexed hold increase for 2022 over 2021. It is on a trajectory to increase hold by more than 20%. This clearly indicates the operators’ requirements to increase profitability.
- Michigan: Surprisingly, Michigan hasn’t seen the growth from year one to year two in handle, but we have seen growth in hold. Handle growth was only around 10% in 2022 but the hold growth is over 20%.
- Illinois: Illinois has seen growth in both the handle and hold during the 2022 football season. They are both continued to grow at an unusually great rate in 2022 considering the rest of the market. Customer acquisition will certainly be a focus for the operators as the market continues to grow.
- New Jersey: New Jersey, which has been running for a long time, shows the deceleration of growth both in handle and hold from 2021 to 2022. Some of this may be attributed to New York’s legalization but most of it is the reduction of bonuses that prop up the handle and hold figures.
Bonus tracking
- Monthly active users (MAUs) from Rush Street Interactive from Q2 to Q3 went from 133,000 to 130,000 having spent $45m during Q3. Losing MAUs demonstrates the challenges major operators have to acquire customers.
- Caesars is expecting its interactive division to contribute to the whole company’s bottom line for Q4 2022.
- PENN Entertainment’s launch in Kansas saw its mychoice loyalty program members contribute 45% of its sports betting handle.