Iowa the First to Report July Sports Betting Figures... And They Aren't Great

Iowa, traditionally the first state to report its sports betting figures from the month before is out with their July numbers and they could present a troubling sign for the broader US market. The seasonal summer sports betting slide hit a new level during July in the Hawkeye State, despite the later-than-usual end of the NBA season, the Olympics and Euro 2020.

A double-digit handle drop for Iowa sportsbooks is certainly an eye-opener for those depending on the state’s betting scene and could be just the start of a miserable reporting period for all participating US jurisdictions.

“The Olympics and the later-than-usual NBA Finals gave bettors more opportunities to place a bet than what would be a typical July, but neither were able to move the needle much,” said Jessica Welman, analyst for the PlayUSA.com Network, which includes PlayIA.com.

“Bettors simply check out in July, when summer vacations and other pursuits take precedence,” Welman followed. “But a surge in betting will certainly come with the beginning of the football season.”

Getting Into the Figures

The Iowa Gaming and Racing Commission revealed on Thursday that July was the worst legal sports betting month since November. July was the fourth straight month of handle declines and the worst month-to-month drop the state has seen.

When all receipts were added up, Iowans spent just $88.9 million at the state's sportsbooks in July which represents the first time since November the betting activity produced less than $100 million. $88.9 million is a healthy 20% drop from the $111.1 million in June and more than $72 million off the state record $161.44 million recorded in March.

Iowa's mobile sports betting apps dominated the overall handle, unsurprisingly. $77.9 million of Iowa's July's $88.9 million total handle came from the state's mobile platform, leaving just $11 million coming from the retail wing of Iowa's legal sports betting industry. Retail saw a 31.4% month-to-month drop.

Revenues Fell Too

Revenues also revealed a month-to-month decline, although they were not quite as stark as the overall handle. Iowa sportsbooks made $7.1 million in July, which is a 15% drop from the $8.4 million reported in June.

Revenues resulted in $479,479 in taxes for state and local coffers, a 15% dip from the $568,502 contribution from June.

The hold rate in July for Iowa sportsbooks came in at 7.9%.

Olympics Falling Flat?

There was potential of the Olympics being able to at least mitigate some of the summer slumpage that legal sportsbooks across the US were enduring. Early data shows that an Olympic bump didn't necessarily materialize for needy books in Iowa.

“We expected to see a decline this month in numbers; however, we were unsure how much,” said Brian Ohorilko, commission administrator. “I have heard from a few operators in our state and have read in a few national industry publications that wagering is less than expected on the Olympics. Some speculation is because of the time difference between the U.S. and Japan. This is anecdotal, however, as most states do not have a base to compare to since last year was disrupted with COVID and the last Olympics was some time ago.”

The Bigger Picture

Although July's numbers may be disappointing, a look at how the Iowa scene has performed since its launch almost exactly 2 years ago shows just how effective and reliable the state's market has been.

In two years, sportsbooks in the relatively small state have taken in an impressive $1.7 billion in bets while creating $122.8 million in revenue for the state's betting providers. A total of $8.3 million has been contributed from legal sports betting to needy state and local tax coffers over that time.

2020 and 2021 have been strong considering the COVID headwinds presented to the industry. “Iowa has experienced so many twists and turns over the last two years, but the state’s sportsbooks find themselves in a good place,” Jessica Welman said. “Sportsbooks will hit more than $1 billion in wagering by September at the latest, nearly doubling the handle for all of 2020 before football kicks off. That is staggering growth.”

The Future Is Bright

It is no secret that the Iowa legal sports betting scene is bearing down and waiting on September 9 and the kickoff of the NFL season, when a strong bounce back is all-but-guaranteed. Getting though August will be tough but there is definitely a pot of gold at the end of that rainbow.

As Wes Ehrecke of the Iowa Gaming Association said: "that lull will be changing significantly by September, and it will be exciting to see what the numbers will be this fall with more mobile sports wagering choices.”

So, while Iowa looks as though it is in a sports betting hole right now, September is coming and brings with it NFL and college football. The $161 million monthly handle record could fall soon after and at very least will be in serious jeopardy until March of next year.