Nevada's December Decline Highlights Broader Issues for The Silver State

For most US states, being the second-most successful legal sports betting jurisdiction in the country would be an honor... unless you are Nevada. The "Grandfather of Legal Gambling" was forced to eat a little humble pie in 2020, partly because of something that was out of their control - COVID-19, and partly because of something that was within their control - an antiquated mobile sign-up procedure.

Figures released Thursday by the Nevada Gaming Control Board have Nevada solidly in second place but far off of the numbers produced by the "New King" New Jersey. While still impressive, Nevada's December figures bucked a National trend and declined, albeit slightly. Somehow, while other states have been reporting record numbers, December was the second straight month that Nevada showed a decline in the amount of sports wagers.

Diving Into The Numbers

In December, Nevada sportsbooks reported a $588.5 million total handle, which represents about a 3.5% drop from November when $609.4 million was generated. December's figures are 11% off the state's monthly record handle of $660 million, which came in October.

Sports betting revenues for the month of December came in at $40.6 million, which is an eyebrow-raising 34.4% decrease from the record $61.8 million Nevada sportsbooks made in November.

There is a glimmer of good news, however. Nevada's mobile handle actually increased in November but still trails the most successful mobile states in the nation – by a lot. 59.8% of the total handle in December or $352.2 came from mobile apps, an increase of 2.4% from November's $343.9 million. The state earned $2.8 million in tax in December.

Year-Over-Year Figures Lead to Some Nevada Soul-Searching

Concern for Nevada in the US legal sports betting scene has come in the form of its year-over-year performance, which was partly expected, but still somewhat disappointing. December 2020's $588.5 million total handle was an increase of just 3% from December 2019’s $571.1 million – decent, but not where the state hoped to be to begin 2021.

Revenues for December 2020 compared to December 2019 also showed just modest gains, which have to be a slight disappointment for the industry in Nevada overall. The $40.6 million last month was only an 11.7% increase from December 2019 when Nevada sportsbooks made $36.3 million.

For The Year

Nevada, considering what is going on in the world, and the state’s reliance on a virtually non-existent tourism sector did OK in terms of their 2020 sports betting numbers, but they need to improve has become a reoccurring theme. New Jersey's dramatic takedown of Nevada last year and other states nipping on their heels in terms of sports betting figures should be a wake-up call to regulators in The Silver State.

For the year, Nevada reported with $4.3 billion in total handle, which represents their worst showing since 2015. Sportsbooks in the state won $262 million from bettors in 2020, which is a dramatic 20.65% drop from the $329 million they made in 2019.

For the year, the legal sports betting industry contributed about $17.6 million in tax revenue for needy state and local coffers.

Those Inevitable New Jersey Comparisons

It is no secret that Nevada's sports betting platform was built on tourism and in-person wagering at the state's casinos, while New Jersey got the ground running on their legal platform with a strong mobile betting focus. Analysts point to New Jersey's strong mobile wagering presence for its astronomical betting numbers.

New Jersey, in the end, put a ton in the distance between themselves and Nevada in 2020. The Garden State took in just over $6 billion in bets last year - Nevada's total handle was $4.3 billion. New Jersey's December haul was an astounding $408 billion more than Nevada's - the Garden State took in a national record of $996.3 million last month while Nevada generated $588.5 million.

Mobile sports betting apps continued its dominance of the overall handle in December in New Jersey, contributing a record-$929.3 million or 93.3% of the $996,300,794 handle. Nevada's internet-based platform was responsible for just 59.8% in December.

Looking Ahead

You can't look ahead without looking back at the impact of COVID-19 on the Nevada legal sports betting scene. There is still no guarantee when our world will return to "Normal", and Vegas becomes the thriving tourist-mecca that it has become accustomed to.

But if there is no evolution of the sports betting platform in Nevada, namely its antiquated in-person sign-up requirement for mobile apps, Nevada is in danger of falling farther behind New Jersey and will continue to be threatened by up-and-coming states in the industry.

Pennsylvania generated a total handle of $548.6 million for December - $40 million behind Nevada, and other states like Illinois and Michigan aren't too far behind.

It is hard to fathom the state of Nevada being threatened in terms of its standing in the US sports betting community, but that is where we stand as we head further into 2021. Adaptation and innovation have been themes in the industry since 2018. The time is now for Nevada to embrace that philosophy and evolve.