Iowa sports betting is coming at a good time for the state’s casino industry.
Some of Iowa’s 19 brick-and-mortar casinos will begin retail sports betting on Thursday afternoon, which will help boost admissions to the properties. From January through last month, the casinos admitted about 11.35 mm guests, down 4.6% from the roughly 11.9 mm admitted during the same period in 2018, according to an analysis of state figures from US Bets.
The admissions dip has been partially blamed on recent flooding in western Iowa, according to a report in July from The Gazette. However, casino admissions have been down for a few years now:
- 2018: 20.34 mm
- 2017: 21.39 mm
- 2016: 21.77 mm
- 2015: 21.65 mm
- 2014: 21.12 mm
Despite the significant declines in admissions, gaming revenue is relatively unchanged.
Adjusted gross gaming revenue of $849.36 mm through the first seven months of 2019 was down 1.1% compared to the same period last year, state figures show. The state’s 19 commercial casinos saw $1.46 billion in gaming revenue in 2018, up 0.3% from 2017, according to the American Gaming Association.
Under ideal market conditions, Iowa has the potential to see around $4 billion in annual sports betting handle, which could generate around $250 mm in gaming revenue, according to a 2017 study from Oxford Economics, commissioned by the American Gaming Association.
Assuming no cannibalization of existing table game and slot gambling, sports wagering could grow Iowa’s casino market by more than 15%.
Iowa legalized sports betting in May, including online/mobile betting. It’s unclear when online gambling will begin, but it reportedly could come as soon as this week for some of the books.
PointsBet, which partnered with Catfish Bend Casino, is rumored to be close to launch. However, a spokesperson for the online sportsbook told US Bets on Monday that it couldn’t comment about an upcoming Iowa launch. Catfish Bend is expected to begin retail betting this week.
William Hill, which will open four retail sportsbooks on Thursday, has already started to take personal information from would-be online bettors and is offering on-site promotions for “member” sign-ups on Thursday. William Hill will offer betting at Isle Bettendorf, Isle Waterloo, Lakeside Hotel & Casino, and Prairie Meadows Casino & Hotel. The latter is the top gaming revenue-generating casino in the state.
Penn National Gaming’s Ameristar Casino Council Bluffs will also take bets on Thursday.
Under Iowa law, official registration for online gambling must occur at an Iowa casino until Jan. 1, 2021, a significant blow to the market potential. After the restriction is lifted, bettors can register, as well as fund, their online/mobile accounts remotely from anywhere in the state.
First state in the midwest with sports betting
For at least the remainder of 2019, Iowa will enjoy regional exclusivity for sports betting. It’s the first state in the midwest to begin the activity, made possible by the Supreme Court ruling in May 2018.
States that border Iowa are Minnesota, Nebraska, Missouri, Illinois, Wisconsin, and South Dakota.
Illinois legalized sports betting this year, but that state’s casinos aren’t expected to begin legal betting until 2020. None of the other states have legal sports betting.
Nebraska and Minnesota are especially strong feeder markets for Iowa casinos.
“Great news for Diamond Jo’s Casino, which is just across the Minnesota border in Iowa,” Minnesota state Rep. Pat Garofalo, a proponent of legal sportsbooks, tweeted in May after Iowa legalized sports betting. “Look for a steady stream of Minnesotans and their spending to be going to Iowa this year. Disappointing that Minnesota refuses to move [on] this issue.”
Nebaskans already spend more than $300 mm each year at Iowa casinos, a number that will only grow thanks to legal sports betting. The activity in the Hawkeye State is expected to deal another blow to Nebraska’s struggling horse racing industry. Five of Iowa’s 19 casinos are near the border with Nebraska, while seven are situated on the state’s eastern border.
Iowa’s commercial casinos have in-state competition with four tribal casinos. Though those casinos aren’t eligible for sports betting under Iowa’s sports betting law, they could offer sports betting under tribal sovereignty. Tribal gambling is regulated by the federal government.