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Fast-growing Iowa sports betting still has 'potential' for growth
13th November, 13:20DES MOINES -- Iowa gamblers continue to double down on sports wagering in their rookie year, placing $46.5 million in bets last month that pushed the overall handle for wagers online or in person to $93.6 million since it became legal in mid-August.
Figures released by the state Racing and Commission show the wagering handle at the 18 state-license casinos currently offering sports betting increased from nearly $38.53 million in September to more than $46.5 million last month.
The overall total since Aug. 15 of $93.6 million breaks down to nearly $51.4 million wagered online using apps offered by seven casinos, and $42.2 million in retail sports betting -- meaning patrons have to travel to a casino where they've registered to place a bet.
Few than half the casinos currently offer gamblers the ability to place bets online in Iowa: Altoona, Bettendorf, Davenport, Larchwood, Osceola, Riverside and Waterloo. The Casino Queen in Marquette is the only state sanctioned casino without a sports betting license.
"I think Iowa has a lot more potential to unlock," said Max Bichsel, vice president of U.S. business for the Gambling.com Group, a marketing company in the sports betting industry.
The state is early into sports wagering, he said, and still has an immature market that will expand significantly once all 19 casinos with state licenses offer sports betting and online options become more common.
"I fully expect there to be a lot more mobile operators than just seven," said Bichsel, who business publishes comparison sites for legal online gambling services and provides sports betting tips, picks and expert commentary. "That's really an inhibitor to growth and really getting the numbers up there in the hundreds of millions versus the tens of millions in terms of handle. I think that's the way that you exponentially grow the business, so that's really the only down side of those Iowa numbers -- thinking what they could be."
Iowa's decision to initially require in-casino registration for mobile sports betting apps is hindering online action and growth overall, he said, when compared with other states.
That requirement will end Jan. 1, 2021, under legislation approved last session and signed by Gov. Kim Reynolds last May that legalized betting not only on pro and college athletics, but also on daily fantasy sports such as at DraftKings and FanDuel.
Initially, Iowans have to travel to a licensed casino to establish an online account and meet the qualifications to participate. Some casinos offer sports betting only on site, but Wes Ehrecke of the Iowa Gaming Association -- an umbrella group for the 19 licensed casinos in Iowa -- said he expected more will adopt mobile apps for in-state betting.
"It's my understanding there will be a few more before the end of the year or even by the end of the month, just to get that technology worked out with the apps to have to be able to offer the online. I think that will certainly make a difference," said Ehrecke.
"The interest in October was pretty good," he added. "As this continues to mature, the interest will continue to grow and likewise the revenues to the state."
Overall adjusted gross revenue from sports betting -- accounting for winner payouts -- grew from $4.9 million in September to $5.6 million in October and stood at $12.78 million for the year to date, according to commission data. Sports betting has brought in $861,846 of state tax revenue based upon a tax rate of 6.75 percent.
According to data so far, the growth in sports betting does not appear to be coming at the expense of other gambling. For the first three months of fiscal 2020 -- that's July, August and September -- overall gambling numbers at state-licensed casinos were up about 7 percent compared with the same quarter a year ago.
Bichsel said he expected to see Iowa's sports wagering market grow because fall is the start of the "prime sports betting time" -- professional football, basketball and hockey along with the overlap of college football and basketball seasons that attract a lot of interest in college bowls and national playoffs, the NFL's Super Bowl, the NBA and NHL playoffs and the return of major league baseball.
"In terms of when you would expect to see the most volumes, we're in the throes of that as we speak," said Bichsel. "The moral of the story is I think Iowa is definitely a state that has significant potential."
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