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Underdog Sportsbook is off to a decent start in North Carolina, but is a long way from being ready to take on the US online sports betting market leaders.

That’s according to the latest Sports Betting Market Monitor report from Eilers & Krejcik Gaming (EKG).

The report includes several key data points and analysis from the US sports betting market, including market share statistics as well as predictions for the future of the sector.

Below, NEXT.io sets out some of the key talking points from the March edition of the report, using data up to February 2024.

Underdog still not ready to bite

One company to go under the microscope in this month’s report was ‘DFS+’ start-up, Underdog Sports.

The operator launched its first online sportsbook offering in North Carolina last week when the state’s market went live, alongside a roster of the biggest betting brands in the US market.

Underdog also holds potential market access in a further five states, representing around 13% of the US adult population overall.

Having thoroughly tested the brand’s offering, EKG suggested that “the app felt minimum viable – it was zippy and easy to use, but in all critical ways (e.g. market depth, features) it was not yet competitive with the tier one operators Underdog is seeking to disrupt.”

With markets still limited to NBA, NCAA basketball and MLB fixtures, Underdog’s product leaves plenty to be desired when compared to its more mature market rivals.

The app is fast, EKG said, “but that’s largely because there’s so little to do”. Features such as sophisticated parlay builders, pre-packaged bets, visualisations and live streaming, are “generally absent” from the user experience.

Part of the reason behind that is Underdog’s desire to replicate “the fun, easy pick ‘em experience of its DFS+ app, with player markets given premium real estate.”

The question remains, however, whether such a style of play will resonate with sports bettors beyond the brand’s existing database of DFS+ users.

Significant enhancements are expected by this year’s NFL season, beginning in September, according to CEO Jeremy Levine.

“There is a lot of work to do here,” EKG concluded, “but Underdog’s DFS+ executional track record and product-first ethos offer some reason for optimism, in our view.”

February online sports betting results

To give some early insight into the results of US online sports betting operators in February 2024, EKG gathered data from the states whose regulators have already released handle and GGR figures for the month.

Results from New York, Indiana, Iowa, Maryland, Kansas and Massachusetts showed a 42% increase in monthly betting handle year-on-year, from $2.5bn in February 2023 to $3.5bn in 2024.

With an average hold rate of 8.19% across all the listed states, operators there generated around $289m in GGR, up 53% from $189m in February 2023.

Massachusetts and Maryland boasted the best hold rates of the listed states, at 10.08% and 10.02%, respectively.

Indiana’s hold rate was 9.36% in February, followed by New York at 7.41%, Iowa at 6.78% and finally Kansas, where the hold rate was just 5.26%.

These early figures provide “a helpful window into upcoming US online sports betting performance,” according to EKG, and indicate “better-than-normal GGR production for the month.”

Excluding Kansas, which was a significant outlier in the data after experiencing 949% year-on-year growth in GGR, Indiana was the fastest growing state on the list with 35% GGR growth.

New York saw growth of 21%, meanwhile, while Iowa saw an improvement of 11% and GGR was up 8% in Maryland.

Trailing 12-month GGR growth

Elsewhere, EKG also reported year-on-year GGR growth across all the live states where comparable data is available.

The table shows continuing healthy growth in GGR figures across the US, with only Washington DC – whose sports betting woes have been well documented – registering an 11.4% drop in GGR over the trailing 12 months compared to the prior 12 months.

The fastest-growing state in GGR terms was outlier Arkansas, whose 157.9% growth rate “benefitted from supply additions in late 2022.”

Elsewhere, GGR in Louisiana was up by 69.2% year-on-year and Oregon also saw outsized growth of 41.9%, “a function of the superior product DraftKings introduced in 2022.”

In several states, GGR growth appears to be driven by improving hold rates among operators.

For example, in New Jersey handle was up 21.6% year-on-year to $12.10bn over the trailing 12 months while GGR grew even faster, up 44.6% to $1.06bn.

Multiple other states, including Nevada, Pennsylvania, Iowa, Illinois, Wyoming, Connecticut, New York and Kansas, also saw year-on-year GGR growth of more than 20%.

More modest growth of under 10% was seen in states including Maryland, with 7.6%, Michigan with 9%, West Virginia with 7.9% and Rhode Island with just 1.8% year-on-year GGR growth.

EKG’s monthly report provides a digest of news and data points, including forecasts, for the emerging market for regulated sports betting in the United States. Please contact managing director Chris Krafcik for more information.

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