It All Adds Up: The House Continues Its Roll As Handle Drags In July

Operators had another strong month against the public to soften expected midsummer blow
It All Adds Up July 2021
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And, finally, the comedown.

It felt like everyone needed a summer vacation, and sports bettors were no different, as handle fell off dramatically in July across the 20 states and jurisdictions nationwide that accepted wagers. The $2.8 billion in bets was 24% lower compared to the nearly $3.7 billion wagered in June and the lowest recorded since close to $2.2 billion in bets were placed in August 2020.

The drop was not unexpected, though. Most sports betting in the month of July centers around Major League Baseball, and even with the slowly advancing trends of microbetting, there are only so many wagers you can place over the course of a three-hour game. The later rounds of the European Championship provided a small boost, though the Olympics failed to move the needle all that much.

As expected, revenue also tailed off compared to June, as the $268.2 million in gross gaming revenue for July represented a 19.8% dip month over month. Adjusted revenue, which takes into account promotional revenue not counted in Pennsylvania, Michigan, Colorado, Tennessee, and Virginia, was 20.6% lower at $238.4 million.

Despite the substantial dips, it was not a bad month for operators, who posted another historically high win rate to partially offset the scaled-back wagering. And the other important part is it moved the calendar closer to the start of the highly anticipated NFL season.

The house party rocks on

For the second consecutive month, the win rate on gross gaming revenue from sports betting exceeded 9%, marking the fifth month of the 38 in the post-PASPA era in which it crossed that threshold. It should be noted there is a notable difference in gross gaming revenue and adjusted gaming revenue when it comes to sports betting, since the five states that currently allow for promotion deduction all rank in the top nine for handle.

Therefore, there can sometimes be a notable difference between the gross revenue win rate and the adjusted revenue win rate. In the case of July, the difference was slightly more than one full percentage point, but it remained high enough to be the fourth-best hold for the house post-PASPA.

MonthGross Gaming Revenue (GGR) Win RateMonthAdjusted Gaming Revenue (AGR) Win Rate
1. September 201811.7095%1. September 201811.7095%
2. September 201910.3738%2. September 201910.3738%
3. October 201910.1226%3. October 20199.8545%
4. JULY 20219.5784%4. JULY 20218.5145%
5. JUNE 20219.0839%5. November 20208.3660%
6. November 20208.9960%6. December 20188.3284%
7. October 20208.6132%7. JUNE 20218.1642%
8. JANUARY 20218.5805%8. October 20208.0404%
9. August 20198.3476%9. June 20187.9468%
10. December 20188.3284%10. August 20197.8457%

The biggest difference from June to July that contributed to the highest monthly hold of 2021 was the performance of Nevada’s sportsbooks. After bettors took the Strip to the cleaners in baseball in June — coming out $1.8 million ahead there — and limited the house to a 1.41% win rate in the sport statewide, oddsmakers hit back with a vengeance in July. The house win rate improved nearly six-fold to 8.35%, as the Silver State set an all-time high for monthly baseball revenue with more than $19 million.

The second prong to Nevada’s surge in July was mixed martial arts fighter Conor McGregor losing his highly anticipated fight with Dustin Poirier, with the Irishman unable to continue after breaking his left leg in the first round. The $95 million handle set a monthly record in the “other” category of statistics provided by the Nevada Gaming Control Board, and the near-10% hold that came with the outcome helped push the overall win rate to a 2021 high of 8.1%

Nevada’s increased win rate, though, was far from a nationwide outlier in July. Even being more than a full percentage point better than the industry standard of 7%, it ranked ahead of only Iowa in terms of win rate among the 20 states and jurisdictions legally accepting bets.

StateWin Rate
1. Delaware27.85%
2. Montana20.02%
3. Arkansas15.44%
4. Rhode Island14.77%
5. District of Columbia14.07%
6. New York13.64%
7. Virginia12.33%
8. West Virginia10.78%
9. Tennessee10.45%
10. Illinois 10.19%
11. Michigan10.07%
12. New Jersey 9.50%
13. Mississippi9.42%
14. Oregon9.15%
15. Pennsylvania9.03%
16. Indiana8.97%
17. Colorado8.63%
18. New Hampshire8.34%
19. Nevada8.12%
20. Iowa7.98%

The 11 states posting a double-digit win rate represented a high for any month this year — prior to the 10 that turned the trick in June, the previous high for any month was eight. When removing February — an outlier to a degree because of how the win rate largely hinges on Super Bowl wagering — Nevada’s hold becomes more significant because it has three of the five national state monthly win rates that finished below 6% this year.

A year of post-COVID sports wagering

Though admittedly a somewhat arbitrary break point for data in the post-PASPA era, the large-scale return to a “normal” sports schedule that started in August 2020 reached a full year with Illinois being the last state to publish its revenue numbers for July.

Perhaps the most interesting part of reviewing the just-completed 12 months is that it appeared operators and oddsmakers needed two months to recalibrate themselves. Since those adjustments, the house has fared quite well versus the betting public.

Time SpanHandleGross Gaming Revenue
Gross Gaming Revenue Win RateAdjusted Gaming RevenueAdjusted Gaming Revenue Win Rate
Aug.-Sept. 2020 $5,064,442,160$281,344,0585.5553%$250,578,3384.9478%
Oct. 2020-July 2021$37,483,019,827$3,012,317,3958.0365%$2,648,939,6147.0670%

Gross gaming revenue win rates in August 2020 and September 2020 ranked 30th and 33rd, respectively, among the 38 months that make up the post-PASPA era. It was equally bleak in adjusted gaming revenue, as they ranked 31st and 34th, with the 4.7% AGR win rate in September 2020 the fifth-worst of the post-PASPA era.

A betting public anxious to resume wagering did not always make for the best betting decisions, however. Five of the last 10 months resulted in operators posting a GGR hold of at least 8.5%, with June and July cracking 9%. In reviewing the first table in this article, those five months also rank fourth through eighth all-time for monthly GGR win rates.

The other byproduct was a somewhat sharp climb of the all-time, post-PASPA win rate. At the end of January 2020, it was 7.13%, but Super Bowl wagering the following month resulted in a 4.96% monthly hold — the fourth-lowest of all-time — that knocked it below the industry standard of 7%.

The back-to-back pummeling by bettors in August and September of last year drove the GGR win rate down further to 6.72%, the lowest it had been since it touched 6.58% at the end of August 2019. Overall handle by September 2020 had reached $28.7 billion, more than double the $11 billion recorded by August 2019.

Slowly but surely, though, the house righted itself. The run of record handles from October 2020 through March 2021 contributed as $23.6 billion was wagered in that span. With high handle comes more revenue, and when the house has good months, the win rate skews higher faster.

By last November, the GGR win rate climbed back over sports betting’s “Mendoza Line” (look it up, kids) and 7.13% by year’s end. Tom Brady and the Tampa Bay Buccaneers helped knock it down again in February as it dipped from 7.28% to 7.19%, but it has since resumed its climb and entered August at just under 7.47% — the highest recorded level since 7.53% at the end of October 2018 when only five states were taking bets.

Where it goes from here is slightly difficult to figure out. In the coming months, there will be a tidal wave of promotional offers in new markets, as Arizona launched in September and both Connecticut and Louisiana hope to launch before the end of the year. What operators may lose in revenue there, they likely will gain elsewhere — most notably in parlay wagering nationwide with the NFL now throwing its considerable weight behind legalized betting.

Athletes’ salaries vs. NY sports betting handle

The good news for bettors in New York is that the process for mobile sports wagering continues to move forward, with bids being evaluated by the state’s Gaming Commission. The better news is this space continues to get to poke fun at the paltry handle created by the state’s four retail sportsbooks.

Mirroring the nationwide trend for July, handle dipped substantially as a fulfilled FOIL request submitted by US Bets showed more than $9.3 million was wagered. It was a 34.4% drop compared to June and also marked the first time handle fell below $10 million in a month unaffected by COVID-19 since August 2019 — the first full month of wagering.

It also meant 24 NHL players, including Edmonton Oilers center Connor McDavid — the highest-paid player in the league based on annual salary at $12.5 million — topped New York’s monthly handle. Rangers forward Artemi Panarin is also on this select list, earning more than $11.6 million.

According to Sportrac, 213 NFL players have an average annual salary of more than $9.3 million, though 2021 No. 1 overall draft pick and Jacksonville Jaguars quarterback Trevor Lawrence just missed being on that list at slightly under $9.2 million.

Delon Wright, who split time between the Detroit Pistons and Sacramento Kings last season, was the last of 137 NBA players to make more than New York’s July handle, earning $9.5 million for averaging 10.2 points, 4.4 assists, and 4.3 rebounds.

Philadelphia Phillies pitcher Kyle Gibson was less than $5,000 shy of being the 123rd MLB player to eclipse the Empire State handle, with oft-injured New York Mets starting pitcher Noah Syndergaard just over the threshold at $9.7 million.

Lastly, with his move to Paris-Saint Germain that came with a reported weekly salary of £2.1 million ($2.9 million), Argentine superstar Lionel Messi looked to be earning more per day ($414,132) than New York accepted in wagers ($301,229 per day) in July.

Photo via Shutterstock

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