Analysis

Michigan smashes records on opening weekend

Michigan’s debut weekend ended up smashing records for a newly regulated sports betting state as hundreds of thousands of new accounts were opened.

Michigan was always going to be a big market when it opened up to regulated sports betting and so it proved with a record-breaking opening weekend.

Add in the opening weekend for Virginia, and it added up to a banner weekend for the regulated operators.

According to data from geolocation services provider GeoComply, over 400,000 new accounts were added over the weekend in the two states.

Meanwhile, across the whole of the regulated sports betting sector the number of individual transactions soared by over 260% to 30 million.

Race for the prize

Michigan will have accounted for the lion’s share of the new account openings as operators rushed to open up their storefronts.

Nine operators were allowed out of the gate last Friday including market leaders DraftKings, FanDuel, BetMGM and Barstool Sportsbook.

Michigan is now a top five state on the Wedge Index of gaming friendliness. Its tally will only be added to in the coming weeks when online gaming officially becomes available in the state. 

Virginia also saw the debut this weekend of offerings from likely market-leaders FanDuel and DraftKings.

Piling up the numbers

GeoComply said the 400,000 new accounts contributed over 7.5 million transactions to the countrywide total.

Timing is all when it comes to a state opening up to sports betting and both Michigan and Virginia were helped by NFL Championship weekend.

GeoComply notes that the increase in transactions has been helped by the fact that seven more sates are open to sports betting compared with this time last year. 

They include Illinois, Indiana, Colorado and Washington D.C.

On social media, GeoComply CEO David Briggs disclosed that over the weekend Michigan drove more volumes than any other state.

Seth Palansky, Vice President at independent not-for-profit corporate social responsibility outfit Conscious Gaming said the news from Michigan would be a hammer blow for the illegal bookies. 

“This demonstrates that Americans will abandon illegal websites and the street corner bookie to place their trust in companies that are accountable, provide robust consumer protections and responsible gaming measures.” 

Eyes will now turn to the handle and revenue data from the regulated states as the sector hopes to build on a record 2020.

Of the Virginia launch for DraftKings, Jason Robins, co-founder and CEO, said the launch came “just in time” for Super Bowl LV. 

“With our customer-first approach, we hope to be the sportsbook of choice for Virginians who enjoy having skin in the game.”  

Record breaking

Analysts at Peel Hunt in the U.K. noted this morning that their estimate for Q4 revenues had been smashed by the numbers from October and November alone.

It has caused them to revise their estimate for sports-betting revenue for 2020 as a whole to $3.1bn from $2.9bn.

“The bounce-back from Covid-19 was greater than we forecast, due in part to the scale of the marketing efforts behind the current land grab in the US.”

The Peel Hunt team pointed to Colorado where market-wide revenues have risen from $2.6m in May, the first month of operation, to $18.3m in November.

The fly in the ointment for operators is the evident dash for market share will mean the timeline for profitability is necessarily drawn out further.

“This will have implications for the cost of competition in the short term, and for the plausibility of the competing claims for market leadership in the longer term,” said the Peel Hunt team. 

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Scott Longley

Scott Longley has been a journalist since the early noughties covering personal finance, sport and the gambling industry. He has worked for a number of publications including Investor's Week, Bloomberg Money, Football First, EGR and GamblingCompliance.com. He now writes for online and print titles across a wide range of sectors.

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