Sports bettors in Iowa continue to defy the odds and take home a larger percentage of revenue than the industry standard. In simple terms; they are beating the house consistently. Even though revenue was down dramatically in February, bettors continued to beat the odds to the dismay of operators.
Iowa Sports Bettors Looking Sharp
The sportsbooks make money from their hold on the overall handle. While the average hold is hard to determine, we can look at historical data from the biggest earners to get an idea of what the number should be. Since Nevada are the kings of sports betting, their handle of approximately 7% is a good number to shoot for. For operators in Iowa, that number is almost double what they’ve been seeing lately in terms of hold.
Operators posted a win rate below 4% in February as bettors in Iowa continue to defy the odds. That 4% represents the fourth-lowest total since launching back in August of 2019. The issue that local operators are having is that those four record lows have come in the last six months. To understand how devastating that can be to their business, you need to understand the sports betting calendar.
High Season Is Almost Over
The most profitable time of the year for operators is known in the industry as “high season”. Those terms aren’t specific to sports betting but it is less straightforward. In the tourism industry where those terms are probably used the most, it’s easy to figure out when the high season would be for the most part.
In sports betting, it has to do with when the NFL season starts and ends in the United States. That is officially the most profitable time to be an operator with all of the professional North American leagues in action (except for Major League Baseball) and NCAA sports in the full swing of things as well.
That poses a major problem for operators in Iowa. If four out of the last six months have been your least profitable ever during the most profitable time of the year, how do you recoup those funds? The answer is that you probably don’t and the only thing that they can hope for is that local bettors go hard during March Madness and the NBA playoffs.
Revenue Has Already Started Slowing Down
The problem for operators has already started to take shape in February. The Iowa Racing and Gaming Commission reported nearly $216 million in handle for February. That represents a 29% decline from the month of January. There is little reason to be optimistic that things will get better outside of March Madness but there is a silver lining here.
If we’re looking at year over year statistics, then February’s handle is actually great. When you compare it with February 2021, that $216 million represents an increase of just over 50%.
At the end of the day, sportsbooks are playing the long game so if handle continues to rise year over year at this same rate, they will make that money back eventually. For now, they’ll have to take these losses on the chin and hope for better days sooner rather than later.