Nevada emphatically proved it is still the home of sports betting in America by posting a record handle of $571 million in September. It surpassed the previous record of $565 million set in October 2017 and the Silver State’s sportsbooks also enjoyed record-breaking revenue. They held $56.3 million in September and that surged past the previous record of $53 million that was set precisely six years earlier. It made a mockery of claims that New Jersey is poised to steal Nevada’s crown as the heavyweight champion of sports wagering and sparked optimism among operators in Las Vegas.
“We have believed all along that the expansion of sports betting outside of Nevada would not hurt our business but could actually help it grow as it gains more exposure and acceptance nationwide,” said Michael Lawton, senior research analyst for the Nevada Gaming Control Board. “This month’s numbers support that theory and we are very encouraged by this month’s results. However, it is still very early in the game as far as sports betting expansion is concerned.”
By contrast, New Jersey took $184 million in sports wagers during September and won revenue of $24 million. Mississippi, another state to roll out legal sportsbooks since the federal ban on sports betting was overturned, had a handle of $37.1 million and kept $5.5 million in revenue. There are pretenders to the throne and they are enjoying strong month-on-month growth, but Nevada is still very much top dog.
Football was the most popular sport at the Silver State’s sportsbooks in September, accounting for 68% of wagers ($389 million), followed by baseball, which had a 23% share of the market ($131 million). Bettors in Nevada might want to think twice about placing parlays, as the sportsbook hold on those was a massive 60.7%. The punters also struggled when it came to NFL, where the casino held onto 11.5% of the money wagered amid a number of high-profile upsets.
Pennsylvania Proving its Prominence
Researchers have tipped New Jersey to overtake Nevada by 2021, but it could face serious competition from neighbouring Pennsylvania. The state has just awarded three more casinos a licence to run sports betting operations, taking the total number to five. In September, Hollywood Casino and Parx Casino were authorized to launch sportsbooks, and Harrah’s Philadelphia, Rivers Casino and SugarHouse Casino will now join them. The Pennsylvania Gaming Control Board met for its monthly meeting on October 31 and heard first from Caesars-owned Harrah’s, which plans to construct a sportsbook with six tellers and 40 TV screens at its Philadelphia property.
Next up was Pittsburgh-based Rivers, owned by Rush Street Gaming, which presented plans for a temporary sportsbook that should be open by December 1. It will feature a large video wall, 15 TV monitors and seating for 98 bettors, and a permanent, luxury facility will replace it in another part of the casino in the spring of 2019. It also hopes to launch an online sports betting platform in early 2019. Finally SugarHouse, also owned by Rush Street Gaming, laid out similar plans for a temporary sportsbook to tide it over until a larger one is unveiled in the first quarter of 2019. SugarHouse is also located in Philadelphia, and it plans to covert its Lucky Red bar into the permanent sportsbook, while also rolling out a sports wagering app.
Operators in Pennsylvania could already be up and running as the state permitted sports wagering earlier this year, but there was a standoff over the high fees it is charging operators. It has demanded a $10 million one-off payment and then it will take a 36% revenue tax. Operators branded it unsustainable and lobbied for a reduction, but the state was unyielding and eventually Hollywood and Parx caved in, opening the floodgates for their rivals to follow suit.
State Wide Competition
Yet one prominent lawmaker believes Pennsylvania could have shot itself in the foot by demanding such high taxes, potentially scuppering its ability to rival New Jersey in the region. Lou Lang, who is driving plans to roll out sports wagering in Illinois, warned a senate hearing that the state cannot afford to be so avaricious. “It is more important to do it right rather than quick,” Lang told the committee. “If you go too quickly, you make a real mess as Pennsylvania did. “If this industry is taxed too high, illegal betting continues. “Why would somebody who’s just a casual bettor make a legal bet as opposed to an illegal bet?”
He makes an interesting point, as the new legal sportsbooks springing up across the US have to essentially steal market share from well-established, off-shore, illegal rivals that do not have to pay taxes, and local bookies that have built up years of goodwill with their patrons. The Sun Herald has an intriguing interview with a Biloxi bookie about the impact legal sportsbooks in Mississippi have had on his business. He says he is still thriving, as he is not required to report payouts of $10,000 or more to the IRS, which legal sportsbooks must do. If they are to compete, the regulated sportsbooks need to make a decent margin and it is harder when you are being charged such eye-watering fees as Pennsylvania is demanding.
Sports Betting Slowly Spreading
Legal sports wagering is now up and running in Delaware, New Jersey, Mississippi, West Virginia and New Mexico, along with Nevada, and Pennsylvania and Rhode Island will soon join the party. Plenty more states are also mulling over plans to roll out a regulated sports betting industry and Virginia could be one of the next to take the plunge. Virginia Lottery director put his thesaurus to one side before telling a finance committee: “We are closely watching the conversation as it unfolds. I have a fiduciary responsibility at the Virginia Lottery to protect the brand we have created over 30 years. I am cognizant of potential competition for the same discretionary entertainment dollar.”
In short, that means he is seriously considering whether to push for sports betting in Virginia. Colorado is also encouraged to follow suit, and Republican lawmaker Cole Wist and Democratic counterpart Alec Garnett believe they can they can convince two-thirds of their colleagues and a majority of voters to legalize sports betting in the state. The sports leagues are increasingly being won over by the industry and the NHL has just tied up a first ever sports wagering partnership with MGM in what commissioner Gary Bettman, once an outspoken critic of sports betting, called “a sign of the times”.
Kristian heads up the content and SEO team at Digital Fuel having worked in digital marketing for ten years. He’s as passionate about creative content as he is about Brighton & Hove Albion FC and when he’s not following football he’s writing about Brighton’s bustling pub scene