In Iowa’s first full year offering sports betting, operators carved out a reputable niche for themselves and showed impressive resiliency recovering from the darkest valleys of the COVID-19 pandemic that dropped monthly handle to barely more than $1.5 million in April.
That recent upswing is to get a further boost Friday morning when the in-person registration requirement to obtain access to mobile sports wagering expires after midnight, paving the way for remote registration and instant access across the Hawkeye State. Bettors will no longer have to travel to any of the state’s 18 casinos — sometimes trekking across Iowa for access to their preferred operator. They’ll be able to do so from the comfort of their own home while using their laptop or smartphone.
Of the 18 states and jurisdictions that report sports betting handle (New York does not), Iowa will likely rank eighth for November based on its $87.2 million total. Illinois, which will not report its figures until mid-January per statutory rules, was No. 4 in October at $434.6 million while Tennessee reported $131.4 million in wagers placed in November in its first report after going live Nov. 1.
Lessons to be learned from Indiana?
Iowa has been linked with Indiana in some respects related to the expansion of sports betting on a state-by-state basis after the U.S. Supreme Court struck down PASPA in May 2018. Iowa Gov. Kim Reynolds and Indiana counterpart Eric Holcomb signed bills legalizing sports wagering five days apart in May 2019, and both states completed impressive regulatory sprints to be operational in time for the start of that year’s NFL season.
Iowa beat Indiana to the tape by two weeks to accept its first wager, and with the help of mobile sports betting — which was not available in Indiana at the time — eked out a head-to-head win in terms of handle in September 2019. But Indiana, which has had remote registration since October of that year, has seen its sports betting market skyrocket in terms of expansion while Iowa’s growth has been at a slower pace.
|Month||Iowa Mobile Handle||Percentage of Iowa Overall Handle||Indiana Mobile Handle||Percentage of Indiana Overall Handle|
While both states recorded their highest handle in November 2020, the totals are remarkably different. Iowa’s peak of $87.2 million in November was its second straight month over $80 million. In contrast, Indiana has recorded a handle of at least $91.7 million in every month since launch not affected by COVID-19. It cleared $100 million in mobile handle on seven occasions and topped $200 million in overall handle each of the last three months, with the Indiana Gaming Commission posting a $251.4 million figure in November.
The chasm in the overall handle is equally drastic. Iowa has a cumulative handle of $682.6 million since launch, while Indiana is bordering on treble that amount with $1.89 billion. Revenue? Also a near 3-to-1 margin, as Indiana sportsbooks have raked in $155.7 million compared to Iowa’s $53.3 million. Bettors in the Hawkeye State do get a tip of the cap for being more savvy — the overall win rate of sportsbooks in Iowa is 7.82% compared to 8.23% in Indiana.
Iowa’s tax collections skew lower, since its rate of 6.75% matches Nevada for the lowest in the nation. Still, it is worth noting Indiana — which also has an industry-friendly tax rate at 9.5% — has collected more in taxes from sportsbook revenue ($4,410,905) in the last two months than Iowa has since launch ($3,653,955).
To be clear, this is not an apples-to-apples comparison. For starters, Indiana has more than double the population of Iowa, and an extra 3,500,000 people matter. Some of that difference, though, is absorbed with Iowa having more border states — Wisconsin, Minnesota, South Dakota, Nebraska, and Missouri — that do not have sports betting compared to Indiana, which can count only Ohio and Kentucky in that category.
The emergence of Illinois affects both states. It is thriving because the in-person registration provision in its June 2019 gaming expansion bill that legalized sports wagering has been suspended on a continual basis since August via Executive Order from Gov. JB Pritzker. Indiana can still siphon bettors from Chicago, the third-largest city in the United States, via casino gaming just over the state line to the east, while Iowa vies for regional supremacy in the Quad Cities area to the west.
Can William Hill fend off DraftKings and FanDuel?
In a landscape seemingly dominated by FanDuel and DraftKings at every turn nationally, Iowa stands out with William Hill as its dominant sportsbook. Its retail presence at Prairie Meadows, arguably the flagship casino among the 19 in the state, gives the British-based outfit a solid foundation. The recent additions of both Harrah’s and Horseshoe in Council Bluffs — the upshot of William Hill recently being acquired by Caesars Entertainment for $3.7 billion — gives it six properties strategically located throughout Iowa to maintain market share.
The combined mobile handle of those properties in November was just short of $27 million, which represented 43.21% of the online handle. That continued the downward trend of William Hill’s market share in the state, which was 51.84% on $25.9 million in September and 47.82% on $27.2 million in October.
Part of that slide has occurred, expectedly, due to the presence of DraftKings and FanDuel. The former is located at Wild Rose’s three locations in Clinton, Emmetsburg, and Jefferson, and FanDuel is at Diamond Jo casinos in Worth and Dubuque. Both made substantial in-roads into William Hill’s market share, and Wild Rose Casino in Jefferson became the first casino besides Prairie Meadows to surpass $10 million in overall (and mobile) handle for any month in November.
|Month||William Hill Mobile Handle||Market Share of Mobile Handle||DraftKings Mobile Handle||Market Share of Mobile Handle||FanDuel Mobile Handle||Market Share of Mobile Handle|
DraftKings’ mobile handle has surged 52.6% from September, while FanDuel more than doubled its handle since launching its online platform in early September. It climbed from $4.22 million in its initial month of operation to $9.05 million in November. When combined, the titans accounted for 38.67% of the market share in November, which figures to continue growing even with a projected bigger pie to be sliced.
Rush Street Interactive will enter Iowa on Friday in an online-only format via BetRivers, extending its presence under that banner into a fifth state along with Indiana, Colorado, Illinois, and Pennsylvania.
“We are thrilled to make history by offering players in the Hawkeye State the opportunity to wager on a broad range of exciting sports betting options from the convenience and comfort of their own homes,” said Richard Schwartz, president of RSI, in a statement. “RSI has earned the trust and preference of players in the Midwest region and across the country by developing a high-performing, secure, reliable online sportsbook and constantly innovating our offerings. We are confident sports bettors in Iowa will appreciate RSI’s player-first, honest and transparent approach to customer service as well as the safety and convenience afforded by remote sign-up.”
PointsBet expressed optimism it can expand its digital presence, counting on its “points betting” option and user-friendly app to work in tandem with its retail partner, Catfish Bend Casino in Burlington.
The next frontier: A $100 million monthly handle
In terms of the pecking order of handle, there appears to be stratification into four clubs. The first is the high-rollers consisting of New Jersey, Nevada, Pennsylvania, and Illinois. The bouncers are not opening that door for anyone without a minimum $400 million monthly handle, and in time, will likely raise that standard to $500 million.
The second club currently is made up of only Indiana and Colorado, with $200 million as the barrier to entry. These two states have punched above their weight class relative to population size, shown they have staying power — thanks in part to remote registration — and can still reach back for a little extra in the crunch.
With remote registration imminent, Iowa is set to join the third club, the one whose members can reach $100 million on a consistent basis. It is also a small bunch — Tennessee entered from the get-go, and Michigan is there currently based on expectation and its impending mobile sports betting launch in mid-January.
Iowa, though, may see its group of the “three best friends that anyone could have” quickly become a one-man wolf pack. The Volunteer State generated its $131.4 million handle exclusively online and with only four operators — one of which is exclusively local to Tennessee — and more are on the way. The Wolverine State has approximately 15 mobile operators ready to throw open their online doors in the 10th-most populous state in the country.
Still, Iowa is keeping good company entering 2021. It can be argued it has been overachieving despite in-person registration given its population size — consider a $100 million handle amounts to an average of every person in the state placing a $31.44 bet — and come Friday, more market potential will be realized.
How fast it all happens will be dependent on how quickly bettors can download an app or type in a web address.