Connecticut’s first full year of legal online casinos concluded with a remarkable milestone in December 2022; the Department of Consumer Protection reported a monthly handle exceeding $1 billion. The final figure was over $3 million beyond the billion-dollar benchmark, representing an unexpected 11% increase compared to November. This record month capped off a streak of four consecutive months with a handle exceeding $900 million. In total, online casino wagering for the year exceeded $9.9 billion, with nearly $5.4 billion occurring in the last six months.
Casino revenue also reached unprecedented heights, with gross winnings amounting to $28.4 million while adjusted revenue (after promotional credits and deductions) reached $22.7 million. These figures surpassed records set in October – close to November levels. Gross revenue experienced a 5.5% increase from the previous month at 39.7% higher than in December 2021. In sports wagering, December’s handle was $160.3 million, marking the third consecutive month within the range of $160 million to $165.1 million. Gross revenue decreased by 9.5% to $15.7 million, as the win rate dipped but remained healthy at 9.8%. The state received $4.1 million in taxes from iCasinos for the year, bringing the total tax revenue for 2022 to $40.6 million.
Overall, sports wagering taxes totaled $1.7 million in December, resulting in a cumulative tax revenue of $14.5 million in that category for the calendar year.
DraftKings’ Promotional Strategy Pays Off
DraftKings – an online casino where participants can withdraw real money – has been more aggressive than FanDuel for online casino promotional play in Connecticut. In December alone, the company offered $22 million in free play, accounting for 3.7% of total wagers of $592.7 million. This promotional spend resulted in a record-breaking $16.7 million in gross revenue – an 11.2% increase from November. Despite a slight dip in hold to 2.8%, DraftKings maximized promotional deductions at 20%, leaving the state eligible to levy taxes on $13.4 million in adjusted revenue.
In contrast, FanDuel’s promotional outlay was more modest (totaling $2.5 million) which accounted for 0.6% of the $408.4 million wagered through online casinos in December. FanDuel narrowly missed record revenue, falling just $150,000 short of the $11.8 million gross revenue achieved in November. Similar to DraftKings, FanDuel also took the maximum allotted 20% for promotional deductions, leaving $9.3 million eligible for state taxes. DraftKings generated $167.6 million in gross annual revenue, outpacing FanDuel by $55 million. However, FanDuel had a higher iCasino hold at nearly 3%. DraftKings reported $128.9 million in adjusted revenue, while FanDuel claimed $96.1 million.
DraftKings also had a higher sports wagering handle for the year, totaling almost $6.1 billion. However, 3.4% of that total ($206 million) was the promotional handle (compared to FanDuel’s 0.4%). The promotional spend of DraftKings exceeded FanDuel’s 2022 outlay by more than twelvefold, with DraftKings reporting eight-figure promotional revenue every month (except January). In comparison, FanDuel’s December spending of $2.5 million was its highest for any month.
FanDuel Dominates Sports Wagering Revenue
Despite FanDuel potentially ceding ground in online casinos, it continues to excel in sports wagering revenue in Connecticut overall. As the sole operator to surpass $8 million in monthly gross revenue, it achieved this feat for the third time in December, generating over $8.3 million. This figure represented a 10.2% decline from the record-breaking $9.3 million achieved in November. FanDuel’s hold also decreased by over one full percentage point to 12.1%. FanDuel maintained a win rate of 12% or higher for the fifth consecutive month in Connecticut, finishing the year with a hold just short of 10% on a handle of $622 million.
Comparatively, DraftKings had a higher sports wagering handle for 2022 at $655.6 million. However, its hold was a more modest 7.9%, resulting in gross revenue that lagged $10.3 million behind FanDuel. For the year, FanDuel recorded $62 million in gross revenue (compared to DraftKings’ $51.7 million). PlaySugarHouse, Connecticut’s other online sports betting operator, finished 2022 strongly with $1.1 million in gross revenue for December, marking the fourth consecutive month of seven-figure revenue. Its hold increased to 8.3% compared to November, but an 18.3% decline in the handle to $13.3 million contributed to a 14.6% revenue decline.
PlaySugarHouse finished the year with gross revenue of approximately $10 million, falling just short of the $10 million mark. Retail sports wagering through the Connecticut Lottery accumulated a handle of $98.7 million in 2022, with December marking the third consecutive month of an eight-figure handle at $10.5 million. Revenue fell just short of $1 million for the year, with a hold of 9.6% for the calendar year, resulting in $9.5 million in operator winnings.
