Sports Betting: Indiana’s New Favorite Hobby?

As Indiana prepared for legalized sports wagering in 2019, the Marc Lopez Law Firm previously wondered how this transition might play out in the Hoosier State. Now that we have a little experience with the reality of sports betting, let’s look at the numbers and see what the first few months have meant for Indiana.

On September 1, 2019, sportsbooks in Indiana officially opened for business. Gaming establishments like the Indiana Grand, the Tropicana, Rising Star, Harrah’s, Belterra, the Horseshoe Hammond, Ameristar, the Hollywood Casino, and Winner’s Circle were all greeted with long lines of enthusiastic patrons. Just over a month later, the State began permitting mobile betting, with sites like DraftKings, BetRivers, and FanDuel offering gamblers the chance to make live, legal wagers from their phones. With additional mobile competitors expected to emerge, these companies are battling fiercely over market shares.

In broadly strategic terms, each of the mobile providers has invested a significant amount in advertising, from the billboards that dot our landscape to the TV spots that inevitably appear at every sporting event’s commercial breaks. Intensive marketing campaigns are something we’ve been conditioned to expect, but the more specific the promotional maneuver, the more interesting things get. DraftKings, for example, decided to hype the regular season Colts-Chiefs matchup in early October. The Chiefs were originally 4:1 favorites to win, but the company inflated these odds to 10:1. DraftKings succeeded in drawing more attention to its mobile app, but when the Colts pulled off the upset, it ended up paying out almost $300,000 to Hoosier bettors. 

Indiana’s sports betting industry is off to the races.

By definition, gambling involves risk, but some people find uncertainty more attractive than others. In the interest of appealing to risk-averse people, the mobile providers have started using can’t-lose scenarios to promote sports betting as less of a gamble and more of an investment with a guaranteed return. For example, FanDuel will sometimes offer to move the point spread by a single point for every 250 people who place a bet on the game. If enough Hoosiers—say, 30,000 of them—take advantage of a promotion like this, it moves the spread by over 115 points, which has the effect of creating an artificially safe bet. 

DraftKings hasn’t been shy about offering its own version of a sure thing. For example, it recently allowed people to bet on whether the Indiana-Penn State basketball game would feature a total of more than 51 points—and in case you’re not a basketball fan, this is a gimme. Since the introduction of the shot clock in 1985, no combined college basketball score has come close to being this low. In the interest of thorough and accurate research, the attorneys at the Marc Lopez Law Firm have been compelled to investigate some of these investment-style gambling promotions.

Going strictly by the numbers, mobile wagering has led to a huge increase in overall sports betting. October saw Hoosiers gamble a total of $91.7 million on sporting events, which represents an increase of 160% from September. In the first month of mobile betting, DraftKings established itself as the frontrunner with $39.3 wagered on its app. In November, the total number of dollars wagered in Indiana grew by another 50 million. By the end of December 2019, that month’s total had swelled to $162 million, which is more than four-and-a-half times the amount that people gambled in September, when sports betting first became legal. Since September 1, nearly $430 has been wagered on sports in Indiana.

It’s worth noting that these numbers might be getting a boost from the fact that neighboring states have yet to embrace legalized sports betting. Ameristar and the Horseshoe Hammond, for example, are both located near Chicago. It may not be a coincidence that the Horseshoe led all casinos in total sports wagering in October of 2019, with Ameristar not far behind. The Hollywood Casino in Lawrenceburg likewise seemed to be benefiting from its proximity to both Cincinnati and the Northern Kentucky area.

Indiana, however, may not enjoy its early adopter privilege for much longer. With the signing of House Enrolled Act No. 1015, Indiana became the 10th state to legalize sports betting. Since September of 2019, three more states have joined the club, with another six looking toward sports betting in 2020. With regard to our neighboring states, Michigan and Illinois can expect to see legalized sports wagers in the near future.

In terms of tax money, the new arrangement has obvious benefits for the State. It can be difficult to measure profit margins precisely, because many wagers are settled at a different time than the bet was placed. For example, a January bet on the Super Bowl would not be settled until after the game is actually played in February. Overall, the State has collected almost $4 million in tax revenue.

Football games account for almost half of all sports wagers in the State.

Although there’s a wide variety of contests you can gamble on, the majority of the action is concentrated in a few key areas. For example, nearly half of all the money wagered on all sports is bet on football games. Parlay bets—which combine multiple wagers in the hopes of multiplying the payout, but for which all bets must win—are the second most popular category, accounting for roughly a quarter of the total handle. Baseball and basketball are currently in third and fourth place respectively, but it will be interesting to see if their numbers increase over a full calendar year, as the baseball season was wrapping up just as Hoosiers were allowed to start betting on games.

The main thrust of Indiana’s recent legislation was focused on sports betting, but let’s not ignore the fact that the bill also allowed for live casino gaming at several locations. In Anderson and Shelbyville, touch screens and video systems are being replaced with live dealers and real dice, which—along with the cigarette smoke—contributes greatly to the authentic casino experience. Live poker is on the way.

The first four months under Indiana’s new gambling laws have been a tremendous success, both for individual sports enthusiasts and for the State. The ease of use offered by the mobile apps combines with regular promotions to create a process that’s approachable and enjoyable, even for the casual gambler. As for the veterans who’re already acquainted with offshore sportsbooks, they can now place the same bets they did before, only with more security and customer support.

If Indiana’s gambling experiment continues to go smoothly, maybe the guardians of morality and public virtue known as the Indiana General Assembly will consider the potential benefits of treating other vices in the same way—with legalization, regulation and taxation. Until then, be safe, enjoy yourself as much as the law will allow, and always remember to plead the 5th!