As a baseball and softball dad, Derek Stevens spent plenty of time coming to Kentucky as his son and daughter played in travel ball tournaments while they were in high school. Although that time has passed, Stevens now has a new reason to frequent the Bluegrass State.
Stevens is the owner and CEO of Circa Resort and Casino, a gaming company that has been deliberate in growing its Circa Sports online sports betting app. Kentucky officially became Circa’s fifth state on Tuesday, although the app has been available here since the beginning of April.
“What we decided to do was that we wanted to make sure that we had everything ready to go before we put any marketing out there,” he told BetKentucky.com, home to all things Kentucky sports betting, in an interview last week. “We’ve been up now for about five weeks, and we’re ready to let people know now.”
Shop Around
Circa’s primary selling point, Stevens told BetKentucky, is that it’s willing to take all comers and offer higher limits and competitive odds. Still, he added that bettors should have multiple Kentucky sports betting apps on their devices.
“It’s very, very important to shop for the best price,” he said. “If you don’t shop for the best price on any given day or any given week, it may not matter, but over the course of a season or over the course of a year, it’s the most important thing that can impact your wallet.”
In Kentucky sports betting, Circa is one of eight licensed operators, having joined bet365, BetMGM, Caesars Sportsbook, DraftKings, ESPN BET, FanDuel and Fanatics. By adding Circa, Stevens said he thinks bettors will get a chance to a better price or spread more often.
“Every sportsbook is a little bit different,” he said. “You’re going to have one sportsbook that has had a lot of action on one particular game, and you may be laying three. Some other sportsbooks, you might only be laying two, and over the course of time, you’re going to want to bet where you get the better line. What Circa Sports does is it provides the customer the ability to see another line and be able to get down on that line.”
How Circa Came To Kentucky
A Michigan native, Stevens now lives in Las Vegas, where Circa’s billion-dollar resort is located in the heart of the city’s Downtown. Las Vegas is also where Ron Winchell and Marc Falcone, the principal owners of Cumberland Run, are located. Their Corbin harness track is Circa’s Kentucky sports betting partner. They also own Kentucky Downs, a thoroughbred track in Franklin.
Some mutual business acquaintances helped bring the three together.
“We probably spent about an hour together, and we already figured out, ‘OK, we’re going to make this thing work,’” Stevens said. “I think culturally, our businesses aligned, and I learned a bit more about Kentucky. I knew the regulatory environment was going to be an environment that was appropriate for our business model. So, we went from there, and then really after that, it’s just getting with the right people and the right organization.”
Following that meeting, Stevens flew out to the Bluegrass State and checked out Kentucky Downs, a turf-only course that races seven days a year in the late summer. Winchell and Falcone have invested millions in upgrading the venue that sits on the Kentucky-Tennessee line. The track is now home to The Mint Gaming Hall, a historical horse racing facility with more than 1,100 slot-like machines on the gaming floor. According to data from the Kentucky Horse Racing Commission, it’s the second most profitable HHR gaming hall in the state. Through March, it has produced adjusted revenues in excess of $100 million for the first nine months of the 2024 fiscal year.
The expansion at Kentucky Downs also includes a 114-room Springhill Suites hotel on-site and a 5,000-square event center. Circa, too, plans to be involved by building a brick-and-mortar sportsbook at the track that could open later this year.
Stevens Talks About Tennessee
While the sportsbook will be in Kentucky, it’s actually residents from another state that Circa hopes to attract to Kentucky Downs. The track is located roughly 40 miles north of Nashville, Tennessee’s largest city. The Mint already draws quite a bit of its HHR players from the state, and Stevens sees it as an opportunity for his sportsbook, too.
Tennessee has had sports betting now for more than four years. It’s a mature market with 12 online sportsbooks. Still, though, Stevens sees an opportunity.
“We take large bets, and we run a low hold model where we target a 2.5% to 3% as our hold percentage,” he explained. “That’s a model that doesn’t work in Tennessee. We think we’re going to provide some unique value to all the citizens south of the border in Nashville.”
Tennessee changed its tax structure last year to assess a 1.85% levy on handle rather than a 20% fee on operator revenues. That means sportsbooks will pay a tax even if they do not make a profit for the month.
Tax Talk Concerns Stevens In Other States
Other states are also considering changing their tax structure. Kentucky, which taxes online sports betting operators at 14.25% of their revenues, is not among the states looking to hike their rates.
However, Illinois, where Circa has an online sports betting app and a retail book, is such a state. Currently, Illinois taxes operators at 15% of their revenues. However, state lawmakers are considering a proposal to more than double that rate to 35%.
Stevens told BetKentucky.com he thinks that’s a bad idea.
“I think it could drive business to other jurisdictions, and more of a concern, it drives business offshore and to illegal bookmaking operations,” he said. “You know, there’s a limit where a tax rate could be. Once you go past that limit, you’re just you’re forcing customers to do something that’s inappropriate, that lowers revenues.”
USA Today photo by Dawn Gilbertson.
