"It's becoming clearer in states with high taxes that their revenues could improve if the rates were lower"

Earlier this month, the latest edition of the G2E exhibition, presented by the American Gaming Association (AGA) and organized by RX, brought more than 25,000 gaming professionals to Las Vegas, fostering industry innovation and driving gaming’s growth.

During the event, Yogonet sat down with Derek Stevens, CEO of Circa Sports, to discuss the company's recent expansions, partnerships, and the brand's future in the rapidly evolving sports betting industry.

Can you tell us about your experience at G2E so far? Have you had a chance to explore the event?

Yes, we had a good opportunity to walk the floor on the second day. I saw a lot of people, and it’s always exciting to see new technology and innovations coming into the gaming space.

Let's talk specifically about Circa. You’ve expanded into Kentucky, and we recently saw the first handle numbers for the state's first year of operations— $2.4 billion. Is the market performing as you expected?

We’re pleased with how Kentucky is moving forward, but I think the real numbers will come during the fourth quarter because of football. This is our first time in Kentucky during the season, and we’re excited to see how October through December shapes up.

One thing we specialize in is taking big bets, and that’s something we’re bringing to the Kentucky market. We also offer tight money line splits and competitive odds, which is a great addition to the state.

Turning to Illinois, another market where Circa now has a presence. What’s your assessment of the first year of operations for the brand there?

We’re very happy with how the online market has performed in Illinois. It’s been a ramp-up for us, and now we’re looking forward to even more growth. We recently concluded a partnership with Marquee Sports Network, the exclusive local television network of the Chicago Cubs. They rebranded their studio as "Circa Sports Illinois Studio" and integrated live in-game betting odds for Cubs games. We’re also about to kick off a new partnership with the Chicago Blackhawks, which we’re very excited about. Illinois has been great for us.

How important have these partnerships been in raising brand awareness in Illinois?

Brand awareness is key for us, especially in a new state. In Las Vegas, we have physical properties like Circa that people can see, but in a new market where we’re primarily online, we need to focus on brand recognition. Partnerships with the Cubs and the Blackhawks have been instrumental in growing our brand in Illinois.

Nevada is Circa's home turf, and you recently opened a new sportsbook at Silverton Casino Lodge. How does this fit into the brand’s overall portfolio in the state?

We’re happy to have added another location in Nevada. We now have four locations outside of our own casinos, including Tuscany, Pass in Henderson, Silverton, and Legends Bay in Sparks. Having brick-and-mortar locations in various regions throughout Nevada helps us expand our reach, and we’re very pleased with the results.

Another major theme for Circa is your football contests, which have broken records again this year. What’s behind their continued success?

The success of Circa Sports Million and Circa Survivor contests shows how much people enjoy playing in these football competitions. Survivor grew by more than 50% this year, from $9.2 million last year to $14.2 million this year. It’s amazing to see that kind of growth. Circa Sports Million, our more traditional contest, continues to grow steadily as well.

Looking ahead, what are your projections for the sports betting industry, especially in terms of new markets coming online?

I think eventually you’re going to see sports wagering come to Texas and California, which are two massive markets that will have a big impact on the industry. I also think there will be a stronger focus on legal sports betting operators, and eventually, we’ll see a crackdown on sweepstakes companies that are currently operating through legal loopholes. I don’t think that’s a sustainable model.

Is Circa actively monitoring these potential new jurisdictions, and what makes a market attractive for Circa’s expansion?

For us, a key factor is the tax rate. We run a low-hold model, so a high tax rate wouldn’t make sense for us. We look for markets with an appropriate regulatory and tax environment that allows us to provide value to our customers.

Do you expect new markets or existing ones to update their regulations to opt for higher tax rates, or will they maintain rates that are more operator-friendly?

It really depends on the state. However, in states with higher tax rates, it’s becoming clear that their revenues could be higher if the tax rates were lower. When taxes are too high, the offerings aren’t as favorable for customers, and they end up betting more in states with lower tax rates.

Are there any customer behavior trends gaining momentum in sports betting right now?

We’re seeing overall growth in sports wagering, and some sports, like college baseball and golf betting, are growing quickly. More people are participating in sports betting, and those two sports in particular stand out to me.

We’re now in the last quarter of the year with football season in full swing. What are your expectations for the next few months?

I think every sports betting operator will have a strong fourth quarter. The interest in football wagering continues to grow, and this year is the first with the expanded College Football Playoff, which will have a significant impact on the fourth quarter.