Overseeing JACK Entertainment’s entry into legalized sports betting, Adam Suliman knows better than most how it is bringing more traffic into the operator’s Ohio properties and attracting thousands of individuals to gambling by phone or computer for the first time.
He’s cautious, however, about the staying power of those eye-popping numbers from the first month of sports betting that resulted in a total of $1.11 billion in January bets in the state, second only to New York. Mobile and retail operators saw a national record of $208.9 million in monthly revenue from the bets, with the state collecting as tax 10% of that.
Suliman, senior vice president of sports and digital gaming for JACK Entertainment, stressed in an interview with OH Bets that a lot of that initial betting was driven by the $320 million in promotional credits given at the outset to customers being pursued by online sportsbooks, including his betJACK. That amount won’t be matched in February or any subsequent month.
His local company and most of the 16 other online operators in January were willing to take a net loss that first month — with promotional offers exceeding revenue — in order to attract customers they hope to retain long term.
That statewide giveaway of $320 million “in 31 days is a lot, so I would expect that to come down,” Suliman said. “It’s come down for us, for sure. … We want to be fair with customers and provide promotions that are meaningful, but we also want to run a business that makes a profit.”
Monthly betting might drop 25%
Only two operators, Caesars Sportsbook and Betr, reported having more revenue in January than they gave away in credits. BetJACK, operating sports betting in its first state, had $407,071 in revenue and nearly $1.2 million in promotional credits, according to the Ohio Casino Control Commission’s financial report.
Suliman said betJACK’s giveaways to customers were actually less in January than the report stated, but he acknowledged the amount exceeded revenue as with most books.
And while revenue is an unpredictable figure month to month in the sports betting industry, Suliman is confident the February handle information reported by the OCCC at the end of this month won’t show another billion-dollar month. Aside from anticipated shrinkage in promotional credits, betting volume in all states drops in February from the shorter calendar and end of football season.
“If I had to guess, I’d say it will be 75 percent of what it was in January,” he estimated. “Ohio was always slated to be like a number five or number six market in the country, and I think that’s ultimately where it will fall. … People love sports in the state, but I’m not sure we can use [January’s betting volume] as a barometer.”
And while betJACK’s $4.2 million in January handle wasn’t even 1% that of FanDuel, Suliman said his company isn’t interested in competing with the major national operators that spend millions on advertising dollars. He said it is catering to residents of the state by means such as creating special bet offers focused on Ohio teams and posting staff-written articles about the teams under a “news” tab on its betting platform.
“We feel we’re in a very good position with our brick-and-mortar properties and our first foray into digital marketing,” Suliman said.
The sportsbooks’ spillover benefit
One thing Suliman knows for sure is that JACK’s Cleveland casino and Thistledown racino are benefiting in multiple ways from the addition of sportsbooks, with a special boost anticipated over the next few weeks from crowds drawn to watch and bet on March Madness.
Like the gaming industry statewide, JACK Cleveland’s slots and table games and JACK Thistledown’s VGTs are off to a better revenue start in 2023 than in any prior year. A variety of factors that are hard to separate out can go into such improvements, but one that Suliman credits is how sports betting is bringing in patrons who might not otherwise be present.
“There’s clearly a halo effect from sports betting going live in Ohio that has helped create a very successful January and February,” Suliman said. “We’re very pleased with the brick-and-mortar sports betting performance in the first couple of months — it’s done what we’d expected — but revenue from it is only a part of the story. A big part of the story is how having that amenity can drive additional traffic,” and those individuals may take part in other gambling, eating, and drinking while present.
Adding Vegas-style sportsbooks to its casino and racino were part of an overall $100 million capital investment by JACK Entertainment recently in property improvements.
JACK Cleveland took $3.5 million in sports bets in January, retaining revenue of $270,483. JACK Thistledown took $1.6 million in bets, with $112,353 in winnings. (February figures for the properties and statewide are to be released at the end of March.)
By comparison, traditional gaming revenue amounted to $23 million in January for the casino (a 25.7% increase from January 2022) and $14.8 million for the racino (an 11.5% year-over-year increase).
Sports betting itself is never considered highly profitable for casinos, but it does have the effect of creating a buzzier atmosphere — especially for big events like the NCAA Tournament, which will capture national attention over the next four days and in subsequent weeks.
It’s far easier to follow action of multiple games in a sportsbook — where they can simultaneously be shown side by side on large screens — than while sitting on a couch at home. Loud cheers and groans are shared all at once by friends and strangers alike as games end, perhaps this month like on no other occasion.
“There’s something special about March Madness in a sportsbook,” Suliman commented, counting on plenty of patrons to come in to see for themselves starting Thursday.
Photo: Courtesy of JACK Entertainment