Sports wagering has experienced an appropriate bloom in the Sunflower State.

Kansas, which raced by neighboring Missouri with a passage-to-launch sprint taking just three-plus months in 2022, put the cap on its first year of legal betting earlier this week when the Kansas Lottery released its figures for August. The 12-month totals are somewhat impressive considering there were four retail books and six mobile ones, with operators accepting $1.85 billion worth of wagers and generating $166.4 million in gross revenue to produce a hold of 9%.

The state collected close to $7 million in tax revenue, as operators are allowed to deduct promotional play and carry over monthly losses in arriving at adjusted gross revenue. The $60 million in AGR is only 36% of the gross revenue, impacted by aggressive introductory offers from mobile operators during the September launch and again in February for Super Bowl LVII.

That total also includes seven-figure overall AGR losses in both of those months, with the heavy wagering on the Kansas City Chiefs as they rallied to top the Philadelphia Eagles in February contributing to Kansas being just one of three states to post a monthly loss in gross revenue thus far in 2023.

“The first year of sports betting in Kansas was an overall success. Thanks to the hard work of so many people across agencies and organizations, we were able to launch in time for the professional football season,” said Cory Thone of the Kansas Lottery in an email to Sports Handle. “The year went smoothly, with no major issues or complications, and our players certainly had a blast betting on their favorite teams. We have learned a lot in our first year, and are eager to kick off the new sports season in the Sunflower State!”

At what price, victory?

States where operators can aggressively make promotional offers are also usually places where DraftKings, FanDuel, and BetMGM can show off their deep pockets to attract customers. Kansas was no different, as the trio of mobile options accounted for 92.5% of the nearly $91.8 million in credits lavished upon the wagering public from September through August.

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DraftKings led the group of six mobile operators in both handle ($753.5 million) and gross revenue ($67.8 million), but it also led in promotional outlay at close to $38.7 million. While FanDuel was second in spending at $25.3 million, that total also represents less than half its $56.1 million gross revenue. BetMGM was willing to pay the price to be the clear-cut No. 3 option in Kansas, as its promotional outlay of $20.9 million nearly matched its $21.9 million in gross revenue claimed.

Two mobile books in the process of rebranding, with Fanatics taking over PointsBet and PENN Entertainment switching from Barstool Sportsbook to ESPN BET, will be worth watching in Year 2. PENN can leverage the top retail sportsbook in the state at Kansas Speedway to continue challenging Caesars Sports for the No. 4 spot, in addition to possibly ramping up promotional play. Fanatics has the tougher road to travel, as PointsBet accounted for just 1.2% of the mobile handle, but the Australia-based book also had the lightest promotional spend among the bunch with $1.2 million.

Though FanDuel’s overall 10.4% hold for the 12-month period led the six mobile books, Kansas bettors have proven resilient against the online titan. The public held FanDuel under that 10% hold in four of the 12 months, matching the combined occurrences across New York, Illinois, Pennsylvania, Virginia, Michigan, Indiana, and Iowa in the same time span.

PENN dominates the retail scene

PENN should have little trouble maintaining its iron grip on the brick-and-mortar handle share, even with the transition from Barstool to ESPN. The Kansas Speedway venue accounted for 76% of the $81.2 million handle in the first 12 months of wagering in Kansas and close to 70% of the $4.6 million in gross revenue.

It also took the biggest hit of any sportsbook, retail or mobile, in February when it reported payouts of more than $1.8 million above the $8.2 million worth of accepted wagers. PENN dug itself out of that deficit in three months’ time, but it has a hold of just 2.4% through the first eight months of the year, claiming $845,000 from $34.9 million handle.

Though figures fluctuate from month to month, the betting public did fairly well when venturing to the state’s four retail sportsbooks in the first year of action. The collective hold was 5.7% — notably below the industry standard of 7% — and each location had at least two monthly losses.

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