The arrival of sports betting in Kansas isn't even six months old, and it's already proving to be a rousing and lucrative success. This much becomes clearer with each and every monthly report. The returns in January 2023 were no different. In fact, the latest reports show that the Kansas sports betting handle is now approaching $1 billion after yet another record-breaking month.
Setting new milestones has become a tradition for The Sunflower State. Each month seems to be more profitable than the last. In November, Kansas tripled its sports betting revenue and then doubled up yet again in December. And after releasing the first reports of the New Year earlier this month, it's become apparent the trend isn't on the verge of reversing.
Kansas Sports Betting Handle Eclipses $206 Million in the Month of January
As we have noted previously, the "handle" refers to the amount of money that was legally wagered throughout the entire state. It does not represent the profit margin for sportsbooks or the state itself. It's just the total dollar amount of sports bets placed, and nothing more.
From September through December, the single-month sports betting handle record for Kansas was $186 million. That mark wound up getting shattered in January 2023. The first Kansas sports betting handle to begin the New Year checked in at $206 million—a roughly 11 percent increase over the previous record.
According to PlayUSA, $196.7 million of this handle came from the state's six licensed retail online operators: DraftKings, FanDuel, Barstool, BetMGM, Caesars and PointsBet. Another $9.4 million came from four on-site operators, which brought the handle to right around $206 million.
After weeding out winning bets and promotional wagers, sportsbook operators ended up with roughly $6 million in total profit for the month of January. When factoring in the state's 10 percent tax rate, Kansas walked away with $600,000 in revenue of its own.
The Kansas Sports Betting Handle is About to Hit $1 Billion in Less Than Six Months
Following their $206 million handle for January, Kansas has now taken in $924.8 million total sports betting transactions. At that rate, they likely eclipsed the $1 billion mile marker sometime in early February.
Few anticipated Kansas reaching the billion-dollar threshold this soon. They are the 34th largest market in the United States and aren't home to many pro sports franchises. Their proximity to other states with pro sports teams has helped their case, but initial projections didn't have them hitting the billion-dollar handle inside six months of the legal gambling launch.
One benefit that wasn't taken into account: The future of sports betting in Missouri. Kansas has repeatedly reported an influx of Missourians driving over from their neighbor to place wagers while they wait for The Show-Me State to pass legal gambling legislature. The absence of sports betting in Missouri is believed to have added tens of millions of dollars to Kansas' overall handle.
Could Kansas' Sports Betting Revenue Convince Holdout States to Legalize Gambling?
Experts within the industry have floated the idea that Kansas' success with sports betting could prompt holdout states—like the neighboring Missouri—to make the transition themselves. It's hard to argue with that sentiment.
Of the $924.8 million wagered in Kansas through January, sportsbooks have pocketed about $27 million. Kansas' cut of that portion comes in at just $2.7 million. And again, this is through just five months of operation. Kansas is on pace to rake in approximately $6.5 million in additional tax revenue during the first full year of legal sports betting.
No state is in position to turn down that much extra money. Especially when gambling is already taking place everywhere. Plenty of the most highly reviewed online sportsbooks allow residents from anywhere in the USA to set up an account and process transactions. Just because certain states haven't legalized gambling doesn't mean they're actually stopping it.
Kansas is Proof that Online Sports Betting Reigns Supreme
This is the other potentially valuable lesson from the Kansas sports betting launch: Online betting is becoming a must when discussing legal gambling.
Over 75 percent of all sports bets placed in the United States during 2022 were processed online. Kansas is among the loudest forms of proof that this trend won't be changing. Just look at their returns for the month of January. Around $196.4 million of their $206 million handle came via online bets. That means over 95 percent of Kansas' total sports bets placed were processed online.
Granted, this represents an extreme relative to the national average, which comes in somewhere between 75 and 80 percent. But the volume of online sports betting in the United States isn't about to change. Remote wagering is more popular than ever. Kansas' online sports betting figures might be inflated by the limited number of brick-and-mortar operators inside casinos, but they're high enough to make other states second-guess their own protocols.
A handful of places in the United States have only legalized in-person betting. Even states that haven't legalized anything yet often come up with proposals that don't include online sports betting. Kansas decided to push for online wagering options when making their transition, and it's paying off in a big way.
So much so, in fact, there are rumblings they might actually have the juice to raise their tax rate and significantly increase their revenue margins in the years to come.
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