Sports Betting In Iowa Could Be An Indicator Of What Comes In Kentucky

Written By Adam Hensley on June 8, 2023 - Last Updated on July 27, 2023
comparing Kentucky to Iowa sports gambling

If Kentucky residents wonder how their sports betting market will look in a few months when it launches, Iowa might not be the farthest comparison.

Iowa has a similar sports demographic as Kentucky. Professional sports teams border the state, but in-state college athletics is king.

They’re not exactly in the same geographical location, but the Kentucky sports betting industry could find itself in a similar situation when its sports betting market launches later this year.

PlayKentucky caught up with Brian Ohorilko of the Iowa Racing and Gaming Commission, who highlighted a few key trends.

“I don’t believe that the fact that there isn’t a professional sports team in the state really impacted the interest or activicty associated with sports betting,” he said. “In a market that is similar to Iowa, with respect to sports teams, I think many people would anticipate a similar type of thing in terms of sports betting still being extremely popular for the fanbase.”

How Kentucky’s market is similar to Iowa

For starters, neither state boasts any major professional sports teams. Both are a hotbed for college athletics, though.

There are the Kentucky Wildcats and the Louisville Cardinals. Those teams are comparable to the Iowa Hawkeyes and Iowa State Cyclones.

You’ve also got mid-major programs with a proven track record of success. Kentucky has Murray State and Western Kentucky, while Iowa has Northern Iowa and Drake.

In both cases, the college football and basketball seasons are wildly popular.

Each state, though, borders more than one with professional teams.

In Iowa’s case, you’ve got Minnesota (Vikings, Twins, Timberwolves, Wild) directly north. Wisconsin (Packers, Brewers, Bucks) is northeast, just above Illinois (Bears, Cubs, White Sox, Bulls, Blackhawks). Missouri (Chiefs, Cardinals, Royals, Blues) resides right along the southern border.

Kentucky borders Missouri and Illinois, too. Additionally, the Bluegrass State touches Indiana (Colts, Pacers), Ohio (Browns, Bengals, Cavaliers, Reds, Guardians, Blue Jackets) and Tennessee (Titans, Grizzlies, Predators).

In short, Iowa and Kentucky are nestled among passionate professional sports fanbases. There are plenty of different alliances (and rivalries) across each state.

In turn, there are plenty of betting options.

Iowa sports betting launched quickly, like Kentucky’s desired timeline

Iowa legalized sports betting back in 2019 — roughly four years before Kentucky’s launch trajectory. Gov. Kim Reynolds signed off on HB 2497 in May 2019, which paved the way for legal bets just a few months later. The bill allowed for both retail sports betting at casinos and online wagers.

Iowa’s timeline is similar to Kentucky’s proposed sportsbook launch plan. It took operators just a few months following Reynold’s signature to start accepting bets.

Gov. Andy Beshear wants his state to launch sports gambling by the start of football season in Kentucky in September. Beshear signed off in late May, which puts the Bluegrass state in a similar position.

Granted, when Iowa legalized sports betting, the market across the country wasn’t as mature as it is now. With more sportsbooks, there are more moving parts. But Iowa showed that it’s not impossible for a quick, successful turnaround.

How Iowa’s sports betting figures grew each year

Iowa’s first fiscal year (FY 2020) in the gambling world ran from August 2019 to June of 2020. That year, the state recorded a handle of $368.02 million, $25.73 in revenue and $1.79 million in taxes. In that first year, retail betting saw a handle of $144.42 million. Mobile sports betting resulted in a handle of $223.6 million.

In FY 2021 (July 2020 until June 2021), Iowa saw $1.23 billion in handle, $89.97 in revenue and $6.01 million in taxes. The retail betting handle jumped to $233.38 million, and mobile betting handle more than tripled, coming out to the tune of $985.07 million.

FY 2022 resulted in a handle of $2.46 billion, $139.58 in revenue and $9.59 million in taxes. The retail sports betting handle jumped about $10 million to $243.8 million. Meanwhile, mobile sports betting resulted in a handle of more than double the previous fiscal year: $2.21 billion.

Ohorilko highlighted “two major factors” regarding Iowa’s rapid growth within the first few years of legalizing the industry: the initial arrival of sportsbooks and their promotions.

With sports betting being so new, ample opportunities and products were available for customers.

“As they got more comfortable, we saw the handle steadily increase those first few years,” he said.

That, along with promotional spending, is something for Kentucky residents to watch.

“Those first few years for customers, it’s usually a good time to be a customer in a state with (new sports betting) bceause there are significant promotions, offerings and bonuses,” Ohorilko said.

After three years, Iowa’s market matured

As of now, FY 2023 is nearly complete in Iowa. We’ll know the total dollar amounts in the coming months, as the most recent findings are from April. But so far this fiscal year, Iowa’s sports betting handle stands at $1.98 billion. The retail handle sits at $200.62 million. Its mobile sports betting handle resides at $1.78 billion.

It appears as though Iowa will not surpass its FY 2022 numbers, and that’s expected.

“I think we’re getting close to a mature market, if we aren’t already a mature market,” Ohorilko said.

Most customers likely have their favorite sportsbooks chosen. Plus, sports betting isn’t the bright shiny new object in town.

It’s not unreasonable to assume Kentucky could have a similar trajectory, just on a larger scale. Kentucy’s population sits around 4.51 million, as of 2021. Iowa’s population, at the same time, was 3.19 million.

“We saw significant growth, and then we saw a pretty consistent 10-20% decline in handle from year three to four,” Ohorilko said. “I think most sportsbooks believe where we’re at now is what they will expect going forward… the promotions have already been offered and customers are settling on the favorite apps that they use.”

Big difference between states with and without professional sports teams?

Ohorilko doesn’t believe there are huge differences in states with professional sports teams compared to those that don’t, like Kentucky. The sportsbooks’ visibility, though, is a different story.

“In those markets  where there are professional sports teams, there is significantly more advertising and promotions taking place with those sportsbooks,” he noted. “… In just about every professional sports contest, regardless of sport, the advertising and marketing right now is usually branded by some sort of sports wagering app or product.”

Sports fans will be passionate and inclined to bet, regardless of if their main team is a collegiate one or a professional organization.

It sounds simply, but things can, however, fluctuate as teams succeed or struggle at both levels.

“I will say, through discussions I’ve had with a number of sportsbooks and casinos in (Iowa), when the local teams are playing well — collegiate or professional (teams) that are popular in the market — it does generate additional activity and interest in the sports betting apps. (You see) more of the casual fans who will come out during that time.”

If they’re like Iowa, Kentucky sportsbooks could see a higher hold over time

Ohorilko explained that he noticed the hold increase over the first four years of Iowa’s legal sports betting.

In the first year, that hold sat around 5-6% thanks to an enormous promotional spend.

“The books definitely have more of a material hold in year four than what they had in year two.”

A promotional spending drop will likely happen in Kentucky after the first few years as sportsbook operators like Bet365 KY Sportsbook and DraftKings Sportsbook KY will not shy away from throwing promotions at new customers, hoping to secure loyal users for life.

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Adam Hensley

Adam Hensley is a staff writer for PlayKentucky. His byline has appeared in the Associated Press, Sports Illustrated and sites within the USA Today Network. Hensley graduated from the University of Iowa in 2019 and spent his college career working for the Daily Iowan’s sports department, both as an editor and reporter.

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