Throughout September, there was neither a lack of sporting events nor seemingly any escape from them.
The after-effects of the COVID-19 pandemic resulted in multiple leagues Canada.
Major League Baseball was working its way through a shortened 60-game season, while the NFL season started as scheduled with limited hiccups and varying amounts of fans in attendance, including no fans at some venues.
All that added inventory proved to be a boon for PASPA was struck down by the U.S. Supreme Court in May 2018.
In turn, that figure helped propel the overall handle generated since May 2018 past the $30 billion threshold (at minimum). Along the way, there were interesting trends that may offer glimpses into the future. So without further ado, a look at the 30 days that were:
| State | Handle | Hold Percentage | Sportsbook Revenue | Taxes |
|---|---|---|---|---|
| Arkansas | $3,958,748 | 10.03% | $397,094 | $51,623 |
| Colorado | $207,655,943 | 2.01% | $4,166,334 | $69,772 |
| Delaware | $12,439,302 | 22.53% | $2,803,023 | $979,283 |
| District of Columbia | $15,455,160 | 11.67% | $1,804,929 | $180,430 |
| Illinois | $305,223,938 | 2.39% | $6,837,289 | $1,025,593 |
| Indiana | $207,450,106 | 6.89% | $14,283,702 | $1,356,952 |
| Iowa | $72,397,241 | 7.14% | $5,167,819 | $348,828 |
| Michigan | $33,503,929 | 13.06% | $4,376,407 | $165,428 |
| Mississippi | $52,220,289 | 14.87% | $6,598,931 | $791,872 |
| Montana | $2,452,738 | 13.08% | $320,800 | $320,800 |
| Nevada | $575,069,930 | 5.72% | $32,894,000 | $2,220,345 |
| New Hampshire | $41,373,620 | 5.54% | $2,290,364 | $990,885 |
| New Jersey | $748,588,349 | 6.02% | $45,083,178 | $5,604,501 |
| Oregon | $26,174,303 | 5.83% | $1,527,543 | $1,527,543 |
| Pennsylvania | $462,787,394 | 4.77% | $6,269,883 | $2,131,760 |
| Rhode Island | $31,293,150 | 7.52% | $2,352,788 | $1,199,922 |
| West Virginia | $64,433,459 | 6.39% | $4,119,540 | $350,161 |
| TOTALS | $2,862,477,599 | 4.91% | $140,575,680 | $19,315,698 |
The rise of ‘Jersey Strong’ and the nine-figure club 4m434c
After having a near-monopoly on legalized sports betting for decades, the state-by-state expansion meant Nevada — anchored by the many Las Vegas sportsbooks — would eventually have to fight to retain its spot atop the list of states generating the highest handle.
“Eventually” was a key word thrown about every time someone talked of a potential challenger to the desert dominance once sports betting became legal on a state-by-state basis. New Jersey had been accelerating that timeline even before COVID-19, however, by edging Nevada in handle in February — a warning shot of sorts across the bow.
Aided by remote registration, high-density population, and multiple public transit entry points from New York City, New Jersey’s time to shine came in emphatic fashion in September. A handle of nearly $748.6 million, which bettered its own previous record from August, dwarfed Nevada’s $575.1 million tally. To be fair, the Silver State is still reeling from COVID-19 with Las Vegas as a tourist destination and in-person registration required for mobile access (an ongoing and well-known pain point), but there is a new king of the sports betting mountain — further confirmed when New Jersey cracked the $800 million mark in October.
| Month | Total Handle | Sportsbook Revenue | State Taxes Generated | Hold % |
|---|---|---|---|---|
| June 2018 | $309,961,639.00 | $24,631,915.00 | $2,093,273.00 | 0.0795 |
| July 2018 | $293,535,556.00 | $8,419,281.00 | $833,287.00 | 0.0287 |
| August 2018 | $357,545,343.00 | $23,419,494.00 | $2,261,068.00 | 0.0655 |
| September 2018 | $817,333,376.00 | $95,705,578.00 | $10,231,000.00 | 0.1171 |
| October 2018 | $853,084,810.00 | $45,987,665.00 | $4,424,018.00 | 0.0539 |
| November 2018 | $995,232,980.00 | $53,783,540.00 | $5,565,750.00 | 0.0540 |
| December 2018 | $992,233,349.00 | $82,636,900.00 | $9,682,206.00 | 0.0833 |
| January 2019 | $1,000,954,917.00 | $42,450,908.00 | $5,700,647.00 | 0.0424 |
| February 2019 | $882,439,027.00 | $52,115,810.00 | $4,412,169.00 | 0.0591 |
| March 2019 | $1,097,866,953.00 | $80,379,128.00 | $10,172,425.00 | 0.0732 |
| April 2019 | $731,081,305.00 | $52,379,793.00 | $7,055,519.00 | 0.0716 |
| May 2019 | $723,182,318.00 | $32,835,854.00 | $4,531,100.00 | 0.0454 |
| June 2019 | $687,558,756.00 | $33,355,374.00 | $4,546,276.00 | 0.0485 |
| July 2019 | $582,833,208.00 | $34,763,862.00 | $4,716,046.00 | 0.0596 |
| August 2019 | $758,136,387.00 | $58,920,095.00 | $7,741,193.00 | 0.0777 |
| September 2019 | $1,397,282,664.00 | $138,696,880.00 | $18,983,452.00 | 0.0993 |
| October 2019 | $1,569,707,353.00 | $152,845,584.00 | $20,492,054.00 | 0.0974 |
| November 2019 | $1,881,394,368.00 | $105,433,925.00 | $15,837,812.00 | 0.0560 |
| December 2019 | $1,858,210,404.00 | $107,137,389.00 | $14,908,220.00 | 0.0577 |
| January 2020 | $1,804,343,392.00 | $130,659,236.00 | $21,484,891.00 | 0.0724 |
| February 2020 | $1,724,430,410.00 | $79,136,425.00 | $9,526,735.00 | 0.0459 |
| March 2020 | $606,872,566.00 | $33,397,505.00 | $6,068,699.00 | 0.0550 |
| April 2020 | $139,180,116.00 | $8,034,693.00 | $1,645,426.00 | 0.0577 |
| May 2020 | $287,540,441.00 | $22,835,434.00 | $3,705,819.55 | 0.0794 |
| June 2020 | $438,559,637.00 | $27,910,253.00 | $4,867,160.40 | 0.0636 |
| July 2020 | $846,839,319.00 | $63,279,159.00 | $8,944,087.91 | 0.0747 |
| August 2020 | $2,037,033,229.00 | $108,060,930.00 | $15,834,624.84 | 0.0530 |
| September 2020 | $2,862,214,740.00 | $140,574,800.00 | $17,415,731.64 | 0.0492 |
One subplot from September came with newer markets Illinois. The Centennial State launched in May, just beyond the peak of the first wave of COVID-19, while the Land of Lincoln’s plan of making a huge splash in March was torpedoed when the sports world shut down six days after going live.
Colorado showed month-over-month growth, reaping the benefits of remote registration as well as a love of table tennis and parlays among its betting patrons, as the handle climbed to nearly $208 million in September.
Illinois, which has a series of statutory and regulatory requirements contributing to a delay in reporting, posted its September figures executive order in June to suspend the sports betting law’s in-person registration requirement, citing social distancing protocols and restrictions on casino attendance. He was then browbeaten to restore the suspension in August after letting his executive order lapse and has since renewed it three more times.
Any doubts about whether Executive Order 2020-41 could help turn Chicago — the third-largest market in the U.S. — into a sports betting engine powering Illinois were put to rest as the Illinois Gaming Board reported a handle of nearly $305 million for September. That figure has plenty of upside to tap considering two of the five mobile sportsbook operators were not operational for the entire month.
Since Illinois’ first legal bet was placed in early March, the state has seen exponential early growth over the first three full months following the COVID-19 shutdown, thanks to the advent of mobile betting.https://t.co/y6iZJOVVL4
— Sun-Times Sports (@suntimes_sports) November 16, 2020
The other two states currently represented in the nine-figure club — meaning those that generate at least $100 million in monthly handle — are Indiana. Both states permit remote registration, have strong regulatory bodies, and have access to densely populated areas. The Keystone State has the luxury of tapping metropolises internally with Philadelphia and Pittsburgh; the Hoosier State has Indianapolis but also held its own retaining some of the Chicago market after Illinois launched. Indiana also is accessible from bordering states that have not legalized sports betting, including Ohio and Kentucky.
Pennsylvania, which posted a then-record monthly handle of nearly $462.8 million in September and sured that with $525.8 million in October, will likely feel the heat from Illinois for the No. 3 spot in rankings. Indiana, meanwhile, showed its September handle of $207.5 million — just behind Colorado’s $207.7 million for fifth — was no fluke by setting a new standard last month with nearly $231 million.
The next tier t3m6x
Michigan will eventually be a member of the nine-figure club, though the timetable remains unclear. The Wolverine State, which generated $33.5 million in handle in September despite lacking mobile wagering and having its three Detroit-based casinos operating at 15% capacity, will soon have online sports betting, but its not-so-secret weapon is tribal gaming.
Thanks to the relentless efforts of outgoing state Rep. Brandt Iden, Michigan’s 23 tribal casinos have agreed to operate sports betting under state regulations and to contribute taxes. BetMGM, and Penn National make up Motown’s operators.
Iowa has some upside still yet to be realized as it approaches the $100 million mark. The state’s in-person registration provision to have access to mobile betting expires at the end of the year, which means bettors from one corner of the state will be able to test-drive sportsbooks from other parts without having to make a registration road trip. Additionally, Casino Queen is expected to be the 18th and final casino to begin taking sports bets before the end of the year.
Iowa totaled $72.4 million in handle in September and toppled that mark in October with $81.9 million. The key to getting to nine figures will likely be Council Bluffs in the western part of the state by the Nebraska border. Ameristar Casino has been one of the state’s best retail sports betting handle producers, while Harrah’s and Horseshoe Casino both launched mobile operations in October.
While not at the expected eventual level of Michigan and the current level of Iowa, Mississippi were solid contributors to September’s record handle. The pair, aided in part by bordering states without legalized sports betting, combined to generate $116.6 million. West Virginia set a new monthly standard with $64.4 million in handle that month, while Mississippi had just its second month suring $50 million since its launch in August 2018.
The lottery gang 4q1570
Of the five jurisdictions in which the lottery maintains a sportsbook monopoly, New Hampshire appears to be the furthest along. That’s perhaps because it gave its monopoly on sports betting to DraftKings, a brand leading in several other jurisdictions, rather than sending a shoddy Intralot product to market, as in Washington D.C., and Oregon. The Granite State set a benchmark for handle with $41.3 million in September, which was almost 50% higher than its August total of $27.5 million.
The District of Columbia is the newest lottery-powered jurisdiction, and while there has been grousing about GambetDC, the entrance of William Hill into the picture has provided both needed competition and a positive jolt. The British-based sportsbook, which operates only out of Capital One Arena, helped generate $15.4 million handle in September.
The two small-population East Coast lottery veterans — Delaware — combined for nearly $44 million in handle, while Oregon has grown the pot in the last three months of reporting. September’s handle of $26.1 million was a short-lived record, as its ScoreBoard platform generated $29.5 million the following month. Montana has quietly made strides since its May launch, and while its handle of nearly $2.5 million in September did not set a new standard, it was one of its top three months.
Revenue and the tax man 2c66n
New Jersey sports betting breaks monthly record for the third month in a row, w/ $800 million collected in October.
👉$7.4 million in taxes
📈NJ on pace to break yearly record ($5 bill, Nevada '19)— Sam McQuillan (@sam_mcquill) November 13, 2020
So where did all that money go? Well, most of it did go to winning bettors. So it goes in this low-margin business. For their part in facilitating the September entertainment, sportsbooks accumulated more than $140 million in adjusted gross revenue, which translated to a hold, or win rate, of 4.91% — a couple shades shy of the 6.5 to 7 percent the sportsbooks typically hold over a longer sample size.
The term “adjusted” is important, because some states do not collect taxes on promotional bets placed, which means the gaming gross revenue in some states is higher than the adjusted gross revenue on which states collect taxes. For example, despite finishing sixth with a handle of $207.4 million in September, Indiana was third in revenue with nearly $14.3 million.
Some of that fluctuation can be attributed to win rates varying from state to state. Mississippi, for example, had an impressive hold of 14.9%, and that resulted in its September revenue of nearly $6.6 million ranking fifth among all states. The Magnolia State, in fact, reported a higher revenue figure than Pennsylvania despite the Keystone State’s handle being nearly nine times bigger.
That is because Pennsylvania does not tax promotional wagers. Its general gross revenue for sports betting in September was nearly $18.3 million, which would have trailed only New Jersey and Nevada and put it in sync with generating the third-highest handle for the month. Some states disclose this information, some do not. Illinois also posted an eight-figure gaming gross revenue for September at nearly $11.7 million, but its AGR was only $6.8 million.
Tax rates are equally variable from state to state. One of the tradeoffs made for not taxing promotional bets in Pennsylvania is having the highest state sports betting tax in the country at 34%. The Keystone State collected $2.1 million in taxes in September, ing New Jersey ($5.6M) and Nevada ($2.2M) as the only states to clear $2 million and among seven to collect at least $1 million.
Indiana has a 9.5% tax rate and generated more than $1.3 million, while Nevada’s tax revenue is generated on the lowest tax rate (6.75%) in the country.
All told, state coffers filled to the tune of slightly more than $19.3 million from September’s record handle. It does not sound like much considering nearly $2.9 billion was wagered, but as states try to plug revenue holes created by COVID-19, tax dollars generated without levying a new tax on residents are valuable tax dollars.
How long until the $3 billion bar gets cleared? 32r6k
The $3 billion monthly handle is an obvious target going forward considering how close sportsbooks came in September. October reporting to date shows that New Jersey, Indiana, and Iowa toppled their respective September bests, and the combined margin month over month was nearly $89 million.
Illinois’ October numbers, which will not be released until mid-December, are also expected to show a significant bump with all of its mobile components (as currently comprised) operating for a full month for the first time. Yet some of those increases could be canceled out depending on the second wave of COVID-19, most notably in places like Mississippi, which does not have mobile wagering. Also note that our September figures did not include wagers from New York State, due in large part to the minimal reporting offered there: only revenue, not handle. (We could reverse engineer based on historical figures, but decided to omit for accuracy’s sake.)
Additionally, casinos will continue to operate at reduced capacities, which affects states that have in-person registration requirements to obtain mobile sports betting. Lastly — and this may prove most crucial to the hopes of a $3 billion handle for a month — September’s sports schedule was a blue moon phenomenon.
Yet, as ever, the nationwide legal sports betting footprint is ever growing. This week Tennessee regulators reported figures from only the first week of legal wagering: $27 million. Project out a full month and that’s another $100 million to the national pie.
So, while the sports calendar remains uncertain, count on the addition of not just Tennessee but soon Michigan and Virginia with their mobile sports betting components. They will very likely put the U.S. monthly handle over the $3 billion bar sometime in the first quarter of 2021, if not sooner.
An uninterrupted college basketball season will certainly help, as the NCAA is examining the possibility of a bubble-like atmosphere for the NCAA Tournament, which is a sports betting cornerstone on par with the Super Bowl.
While there are certainly reasons to bet the under for October, November or December, the “over” has momentum as the ball advances down the field.
