The US legal sports betting industry appears that it could be on the cusp of a market slowdown as we enter the summer season. One of the first states to report their April sports betting handle, Iowa seems to support that notion with the tangible dip in both their April handle and revenues.
Iowa, a reliable and consistent legal sports betting producer seems to have fallen victim to not only a Super Bowl but a March Madness hangover. As one of the first to report out their slightly disappointing April sports betting figure, it begs the question – will other legal sports betting jurisdictions follow Iowa’s decline?
The Iowa Racing and Gaming Commission released their report on the state’s April sports betting figures on Friday, and they revealed an obvious downturn for the state’s bustling industry. The absence of football and the conclusion of the other major spring betting event, the NCAA Basketball tournament obviously affected the overall numbers.
“We did experience the expected decline in wagering for April,” said Brian Ohorilko, administrator of the state Racing and Gaming Commission. “This will likely be the case throughout the summer. We were interested to see where the handle numbers would settle now that the more popular wagering events were complete.”
All together, $118.36 million was bet on sports in Iowa in April, which represents a sharp decline of 26.7% from March’s record-setting $161.44 million. April’s figures are the lowest handle since December and represent the largest single month drop in the Iowa market since its inception in August 2019.
Revenues also struggled in April. Iowa’s sportsbooks reported $7.73 million in profits for the month, a decline of 42.6% from March’s record-$13.45 million. An unflattering and revenue hindering 6.53% hold was reported in April, down from 8.335% in March.
Iowa’s mobile betting handle contributed $104.51 million of the $118.26 million overall handle, just north of 88%. While impressive, the mobile numbers represent a 25% slide from March’s mobile betting take.
Obviously, tax contributions to Iowa state and local coffers declined on the heels of the state’s underwhelming handle and revenues report. Just $521,455 was siphoned from the profits, which is down 42.6% from the record numbers reported in March.
At Least It Wasn’t April 2020
Iowa’s April 2021 declines are nothing compared to the free-fall the market experienced one year earlier, when casinos were shuttered and pro sports leagues around the world were forced to pause their operations due to COVID-19.
April 2021’s $118.36 million handle represents a year-over-year 7,466% spike from April of last year when just $1,568,497 was bet in the state. And this year’s $7.73 million in profits is 5,039% higher than the $150,331 sportsbooks made at this time last year.
Tough Summer Ahead?
It is expected that a widespread legal sports betting downturn could be coming as we head deeper into the summer. The NBA and NHL playoffs, golf, auto racing and of course MLB will still contribute to a relatively full sports betting menu but like the rest of the jurisdictions across the country, Iowa’s sportsbooks will be looking forward to September when both the NFL and college football will start to drive handles significantly higher.
“Nothing can quite replace the interest that the NFL and the NCAA Tournament drives, so a pullback in April is no surprise,” said Dustin Gouker, analyst for PlayIA.com. “But with a full month of regular season NBA and Major League Baseball, Iowa still put together a decent showing in April. That is an excellent sign as we head into the slower summer months, which could be busier than in an ordinary year because of the Olympics and later-than-usual NBA playoffs.”
The legal sports betting scene in Iowa has been terrific during its 18 months of operation and in April surpassed a milestone $100 million in operator revenue since its 2019 launch. The industry will bounce back again but may just take some time to reach the levels in which record-handles are threatened once again.
Iowa has the sports fanbase, all of the top tier sports betting operators and a history of overachieving with regards to their legal sports betting scene. So, while a downturn is almost inevitable, so too is a near guarantee of a robust bounce back.