Colorado Appears To Be ‘Punching Above Its Weight’ On The Eve Of Sports Betting Anniversary

0

As the one-year anniversary of legal sports betting in Colorado approaches, there are clear signals that the Centennial State is batting above its expected average.

Around this time last year, mobile sports betting debuted in Colorado when four sportsbooks launched on May 1, 2020 – BetMGM, BetRivers, DraftKings, and FanDuel. The timing was not propitious. Weeks earlier, the doors of every retail casino statewide closed, forced shut by the COVID-19 pandemic. A freeze of the majority of top global sports left the books with slim pickings – limited to offerings on obscure sports such as Korean baseball, table tennis, and sumo wrestling.

Colorado not only managed, it somehow exceeded expectations. The pandemic compelled some like FanDuel to get creative with free-to-play offerings. DraftKings, that company’s chief rival, used the unprecedented period to test betting activity among the aforementioned niche sports. Table tennis, improbably, still ranks fourth in the company’s Colorado handle over the last 12 months.

The strong early start at BetMGM helped inform its research team of a consequential trend throughout the emerging U.S. sports betting market. Without a retail presence in Colorado, the impressive figures underscore the clout of the company’s omni-channel offerings from a digital standpoint. BetMGM has also learned of the strategic advantages of entering a market as soon as a state goes live, a recipe it plans to implement in newly legalized jurisdictions.

As a brand, BetMGM has exceeded the company’s expectations over the first year of operations in Colorado, BetMGM Chief Marketing Officer Matt Prevost told CoBets. BetMGM is one of a handful of sportsbooks that have secured partnerships with the NFL’s Denver Broncos.

“We credit BetMGM’s early success to the importance of launching on Day 1 when the market opens as well as to our partnership with the Broncos,” he said. “We’re really impressed with Colorado’s broad interest in recreational betting and interest in the long tail of sports across the globe.”

Per capita spending

On Tuesday, the Colorado Division of Gaming announced that total wagers statewide in March eclipsed $300 million, pushing the overall handle since last May above $2 billion. With the strong performance during March Madness, Colorado became just the sixth U.S. state to clear the $2 billion threshold since the Supreme Court’s 2018 PASPA ruling, joining Nevada, New Jersey, Pennsylvania, Indiana, and Illinois.

In February, Colorado ranked third nationally in per-capita spending among sports bettors at $45.90 per resident, according to figures compiled by CoBets. Although Colorado ranked behind two powers in Nevada and New Jersey, the Centennial State finished ahead of larger (by population) states such as Pennsylvania, Illinois, Michigan, and Tennessee. In 2019, Colorado ranked 21st nationally in estimated residents aged 21 and over, according to research from Statista.

The state may be capitalizing on the “Mattress Mack effect,” based on two large seven-figure wagers placed by Houston furniture owner Jim McIngvale. Days before the Super Bowl, the entrepreneur flew into Colorado, where he placed a $3.4 million wager on the Tampa Bay Buccaneers on his DraftKings app from the tarmac of the Colorado Springs airport. Mattress Mack returned to Colorado weeks later for March Madness, when he made a $1 million wager on the University of Houston to win the NCAA tournament at odds of 9/1.

“Colorado at third is kind of surprising, not that I could tell you others that should be ahead, but the big bets with Mattress Mack could make the difference,” DraftKings Director of Race and Sports Operations Johnny Avello told CoBets.

At FanDuel, the average bet per customer is higher in Colorado than its national average, said Matt Garrigan, who serves as the company’s director of New Market Strategy. The metric in Colorado even tops Pennsylvania and Michigan, which are strong states for the company, he noted. The disparity, however, is not astronomical.

Interest in the locals

As expected, betting activity on the top four Denver-based professional sports teams has been elevated in comparison with wagering on teams outside of the state. The Denver Nuggets are the most popular team bet on at BetRivers in any sport. At the company’s other properties nationwide, the Nuggets still fall within the top five of NBA teams, but not near the levels of Colorado.

In hockey, the Colorado Avalanche entered Wednesday with the second-highest point total in the West and bettors have noticed. Wagering on the Avalanche at BetRivers has more than doubled that of any other team.

“As they have been so good, they are still among the top five (NHL) teams bet on in other markets, but nothing quite like the love they have received in Colorado,” BetRivers told CoBets.

While football was king at DraftKings in the fall, Avello believes that interest will be strong in the Nuggets during the NBA playoffs. When looking at the five most bet events over the last 12 months, all five were NFL playoffs games that took place in the most recent postseason. The Super Bowl and the two conference championship games occupied the Top 3.

“If the Broncos were a better team this year, they might have even taken more,” Avello said.

dk colorado anniv

At BetMGM, the Broncos typically have the largest handle of any event on NFL Sundays, Prevost said. The handle on Denver-area teams in other leagues varies due to TV coverage, quality of the matchup, and the time of the games, he added.

The vast majority of the customers are betting at recreational levels — from $10-$50 a bet, Prevost explained. The bulk of BetMGM customers are men (almost 80%) and are based around Denver and the immediate suburbs.

Meanwhile at FanDuel, the company has made a concerted effort to try to differentiate itself through its “Same Game Day” parlay feature and other offerings.

“We like to say we provide our customers with more ways to win,” Garrigan said. “I think that’s true here, just providing customers in Colorado and beyond the opportunity to really dig into different ways to bet on their home teams. We try to keep customers at the front and center of everything we do.”

An open market

Colorado enters its second year with 21 online sportsbooks and 17 more on the retail side. By comparison, a limited operator model preferred by New York Gov. Andrew Cuomo will restrict mobile sports betting to a minimum of two platform providers and four operators. There are strong indications that New York will charge platform providers a revenue-sharing fee of at least 50-55% of its online gross gaming revenue (GGR) for the right to offer mobile sports betting statewide.

Since the needs of each state differ dramatically from a sports betting standpoint, Colorado Division of Gaming Director Dan Hartman indicated that it is challenging to make a determination on if the limited operator model should be implemented in other states.

“From here to New York, we don’t really know what they need to do it. Every state, every regulator has their own individual microcosm of what they need for their state and I wouldn’t second guess any others,” Hartman told CoBets.

Hartman used a grocery analogy to explain the importance of customer choice in an open market. Colorado ranks among the highest in the nation in the sheer number of operators that are allowed to enter a market.

“If you only have one grocery store to go to, you get what they put on the shelves. If you have multiple grocery stores to go to, you get to pick what you want to get,” he said. “You go to this place because it’s got more organic stuff or another because it’s cheaper. You go where it suits your personality, and it’s the same with this.”

Avello pointed to another factor why the Colorado market has achieved a modicum of success thus far.

“They are open thinkers, and really embraced sports betting when it arrived,” he said of Coloradans. “We have a great product up there. We have a lot to offer.”

Jill R. Dorson and Chris Altruda contributed to this story

Matt is a veteran writer with a specific focus on the emerging sports gambling market. During Matt's two decade career in journalism, he has written for the New York Times, Forbes, The Guardian, Reuters and CBSSports.com among others. In his spare time, Matt is an avid reader, a weekend tennis player and a frequent embarrassment to the sport of running.

Comments are closed.