It All Adds Up: A Record $4.36 Billion Handle Highlights January Numbers

The national surge in sports betting continued unabated with a sixth consecutive monthly record for handle
Mountain of Money

Over the course of February, state records for sports betting handle were being smashed everywhere as January reports were being published. In many of those states, new standards for monthly revenue amounts were also being established as the house — after a mediocre December — once again flexed its muscles on the betting public.

When the Delaware Lottery released its report for January on March 2, the state’s $15.6 million handle assured a new national record for the sixth consecutive month. Illinois‘ report was still to come, but when released, it would help reach a milestone no one considered even late last fall — $4 billion in monthly national betting handle — and determine if there would be new monthly standards for both operator revenue and state tax revenue.

The Land of Lincoln finally delivered its January report on Wednesday, and as expected, there is now a “No. 1 all-time” next to all three categories. In keeping up with the Joneses, Illinois set monthly records across the board in impressive fashion.

There are multiple reasons, big and small, that have contributed to what is now a dizzying six-month run. The excitement of crossing $2 billion in handle back in August is quaint considering January’s handle of more than $4.36 billion came within a mere $21.6 million of doubling that total.

Picking up the slack for New Jersey

Lost in this blizzard of money and monthly reports was the national story the sports betting industry had been eagerly anticipating but failed to materialize: New Jersey producing the first single-state $1 billion monthly handle. After coming less than $4 million shy in December, it seemed a fait accompli to some.

Surely the combination of the NFL playoffs and a full inventory of pro and college basketball plus the add-ons of NHL and international soccer would make it happen?

Yeah, no.

In fact, the Garden State reported its first non-COVID-related decline in monthly handle since December 2019 to January 2020. The $958.7 million reported is not chump change — it ranks No. 2 all-time nationally among state reports — but maybe bettors in New Jersey needed to finally exhale after more than tripling the handle from July to December.

A funny thing happened around the nation, though, as multiple states more than compensated for that dip. Nevada, Pennsylvania, and Illinois, which consistently rank second through fourth nationally, outperformed their combined December handle by more than $215 million. Individually, each of them would have absorbed New Jersey’s $38 million backslide.

Nevada and Pennsylvania’s handles also cracked the national top 10 all-time list at eighth and ninth, respectively, and Illinois’ newly minted standard was within shouting distance of the list.

StateDecember 2020 HandleJanuary 2021 HandleChange in DollarsChange in Percentage
District of Columbia$16,696,995$15,746,168($950,827)-5.69%
New Hampshire$51,649,897$59,795,433$8,145,53615.77%
New Jersey$996,300,794$958,717,526($37,583,268)-3.77%
Rhode Island$22,770,472$39,817,327$17,046,85574.86%
West Virginia$53,236,336$67,598,350$14,362,01426.98%

Those states also were not alone in substantial monthly increases as the table above shows.

Michigan unleashed mobile wagering in the form of an 11-operator battle royale in late January and finally began to deliver on its potential.

Iowa‘s in-person registration provision for mobile access expired with the turning of the calendar year, and an already-active mobile scene became more accessible for consumer choice and competition.

Colorado bettors refused to quit on table tennis as the state crashed through the $300 million plateau for the first time.

On its ninth overall renewal, Illinois Gov. JB Pritzker’s Executive Order 2020-41 allowing remote registration is the primary reason the Prairie State ranks fourth in monthly handle nationally.

A new market was christened as Virginia entered the fray in late January in a digital-only format.

All told, six states posted monthly increases that exceeded New Jersey’s decline, and both Indiana and Tennessee had increases of more than $30 million.

Excluding Virginia, 14 of the 18 states and jurisdictions that provide handle in their monthly revenue reports set records. There were two locations besides New Jersey — Delaware and the District of Columbia — that posted declines from December to January. That combined total decrease, however, amounted to less than $1 million.

The daily double of handle and revenue records

All that money wagered looks good. Monthly handle reports that now total hundreds of millions of dollars attract the attention of the casual newsreader, who then maybe becomes the bettor who contributes a few bucks to those head-spinning amounts.

The sports betting industry Twitterverse has debated the importance of publicly prioritizing handle over revenue, a valid point considering revenue will largely determine its staying power and continued expansion throughout the country. Revenue, though, fluctuates on a monthly basis based on events, and without that increased handle, the potential for record revenues lessens.

StateDecember 2020 RevenueDecember 2020 HoldJanuary 2021 RevenueJanuary 2021 HoldChange in DollarsChange In Percentage
District of Columbia$2,708,65216.22%$2,805,49217.82%$96,8403.58%
X-New Hampshire$4,537,6538.79%$4,197,0297.02%($340,624)-7.51%
New Jersey$66,386,5166.66%*82,640,9798.62%$16,254,46324.48%
New York$2,258,771N/A*$3,569,855N/A$1,311,08458.04%
X-Rhode Island$2,533,09011.12%$3,717,2009.34%$1,184,11046.75%
X-West Virginia$4,761,1088.94%*$5,681,3828.40%$920,27419.33%

In the table above, the “X” denotes the states that produced a record monthly handle in January, while the asterisk shows the ones that posted a record in operator revenue that month. Nine of the 14 states that had a record in handle also had one in revenue, and four of them did so despite a dip in the win rate from month to month.

It should be noted Michigan is a large outlier in this instance given its December report did not have a mobile component and its three retail casinos that offer sports wagering were closed for a majority of the month due to COVID-19 mitigation measures.

In addition to nine states setting operator revenue records, another five had a figure that finished second or third in its all-time annals since launching sports betting. Taking it one step further, New Jersey, Nevada, and Pennsylvania all had January revenue totals that rank in the national top 10 all-time, with the Garden State obliterating its previous short-lived record thanks in part to its win rate climbing nearly two full percentage points from December.

Much like handle, it is the little things that contribute to records falling. Unexpected outcomes, such as Conor McGregor losing in UFC 257 and Tom Brady guiding the Tampa Bay Buccaneers to three playoff road wins, help the house.

Then there are the big things, like parlay wagering.

The parlay factor

Look, no one is ever going to stop a bettor with a dollar and a parlay fever dream, no matter how ludicrous. Sportsbooks are using social media to further this phenomenon, offering their own parlays and asking the betting public which leg will consign it to the internet dustbin.

And yes, sometimes half the fun is picking 11 unlikely outcomes that create odds slightly better than the proverbial snowball surviving its trip to hell. In terms of entertainment, there are far worse ways to spend a dollar.

All that said, the limited snapshot available from states that furnish full information on parlays shows just how important the category is to an operator’s bottom line. New Jersey, Nevada, Illinois, Colorado, Mississippi, and Oregon provide those reports with relation to handle, revenue, and win rate.

Delaware offers exclusively parlay options at retail lottery locations, but it does not break down wagers taken at its three racetracks. Indiana provides only a handle amount, and the $86 million wagered there in January was nearly one-quarter the overall handle.

The seven states where a fuller picture can be obtained shows a combined handle of more than $408 million, of which New Jersey and Illinois account for more than 80% of that total. What stands out more, however, is the $77 million in revenue generated. That accounts for 21.3% of the national revenue total for January — the 18.86% win rate for the house on parlays in those locations was more than double the national overall hold of 8.19%.

Coming soon … $5 billion?

It seems unlikely February will extend the national record handle streak to seven months. For starters, February has only 28 days, and while three days does not sound like all that much, it is nearly 10% of a month with 31 days.

Additionally, the NFL season is finished. Some states will show Super Bowl bumps in handle and revenue, but there is also a burnout that comes following the premier event of the U.S. sporting calendar year sucking up all the oxygen.

But that’s OK. Because March, as colleague Eric Raskin pointed out recently, should mark the first run at a $5 billion handle. Before Illinois released its January report, there was some internal skepticism — no one knew how far north of $500 million Illinois would go. But there is now increased confidence in viewing January’s $4.36 billion total versus $4.27 billion had Illinois only maintained its handle from December.

And Illinois welcomes a new mobile player into the mix Thursday when Barstool Sportsbook launches. All of a sudden, $600 million for the state does not seem like a pipe dream. Michigan and Virginia should see substantial increases from their respective January figures, while Tennessee figures to get a NCAA tournament bump from the novelty of its availability.

Even with states that prohibit wagering on in-state schools (we’re looking at you, potential No. 1 seed Illinois and 2019 champion Virginia), there are now enough “neighboring jurisdictions” where a short drive over the state line eliminates that problem.

The $5 billion handle could hinge on Indiana, site to all of March Madness and thus the center of the sports betting universe starting next week. Even with 25% capacity limits at tournament sites and ongoing COVID-19 mitigation measures, it would not be surprising to see regional fans — or at least ones from NCAA tournament-bound Big Ten schools — make the trek to Indianapolis.

The Hoosier State will be awash in basketball, and a state already punching well above its weight in terms of generating sports betting handle could see that potential influx of people help land the knockout blow of reaching that $5 billion milestone.

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