It All Adds Up: House Delivers A November KO

NFL-fueled surge in handle leads to record revenue for operators
It All Adds Up November 2021
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Eventually, a tidal wave of monthly sports betting revenue was going to hit the United States. And it finally crashed the shore in November.

The ideal combination of large-state expansion, widespread popularity of an “alpha” sport (NFL), and a string of favorable events for the house did more than create monthly national records — it shattered them. Operators had plenty of reason to give thanks in November, when 21 states and jurisdictions — technically 22 if counting debutant Louisiana — set post-PASPA monthly gross revenue records as bettors took it on the chin and, like Thanksgiving dinner, kept coming back for seconds and thirds.

The final numbers compiled after Arizona settled up and reported were simply astounding: more than $723.3 million in gross revenue after no previous month had reached $450 million, over $614 million in adjusted revenue when no prior month reached $345 million, and close to $97 million in state taxes when there had only been three prior occasions $50 million had been cleared.

All this came with approximately $146.3 million less wagered than October’s record of more than $7.5 billion. The money the public won that month, creating a 5.9% win rate that is currently the lowest of 2021, went right back to the house as its bounce-back 9.8% win rate in November marked the fifth-highest among the 42 months of the post-PASPA era.

These numbers serve as mere prelude for January’s reports, which will skew everything we think we know when New York‘s first full revenue report with mobile sports betting is made available. The New York State Gaming Commission has been fueling the hype machine with weekly reports that have made number crunchers’ heads spin, but we’ll leave that alone for the time being to review another notable beating the house administered upon the public in 2021.

Money train arrives with a 9% win rate

MonthGross Gaming Revenue Win Rate
September 201811.6544%
September 201910.3514%
October 201910.0167%
NOVEMBER 20219.7713%
July 20219.5632%
June 20219.0839%

Of the six occasions the monthly gross revenue win rate has finished 9% or higher, three of them occurred in the first 11 months of 2021. Timing is sometimes everything, and while operators performed well in both June and July, those efforts have been somewhat forgotten given the smaller handle associated with the slower summer months.

Consider: The combined national handles of June and July amount to slightly less than $6.5 billion, which is 87.5% of November’s $7.4 billion wagered. Furthermore, July’s revenue total of $267.7 million is the third-lowest monthly total of 2021 and 37% of November’s revenue haul.

As discussed in October, the first year of NFL-sanctioned sports betting — through both its official primary partners FanDuel, DraftKings, and Caesars and approved sportsbook operators PointsBet, WynnBET, BetMGM, and FOX Bet — is making a monumental impact nationwide. It was not just states setting monthly record revenue totals as much as it was the staggering month-over-month increases from October, as the win rate spiked nearly 4 full percentage points higher.

That was the second-largest month-to-month climb for the hold since one of more than 5 points from August to September in 2018. Back then, there were only five states taking wagers, versus the five-fold increase in November.

Seven states more than doubled their revenue totals from October to November, with the overall figure a 61.9% improvement from the $446.9 million collected in October. Two states — Iowa and Connecticut — tripled their totals, but the Nutmeg State gets an asterisk since it launched that month and was not fully operational for the entire 31 days. Relative newcomer South Dakota was the only state to report a month-over-month decline, while Mississippi was the only state to report a single-digit percentage growth.

Pennsylvania took the crown as the biggest mover in terms of dollars, as its $84.9 million was slightly more than double the October haul and is currently the largest monthly revenue total of any state outside New Jersey. And speaking of the Garden State, it claimed another sports betting first in posting a nine-figure revenue amount after operators claimed close to $114.8 million.

StateNovember 2021 Gross RevenueOctober 2021 Gross RevenueIncrease in DollarsIncrease in Percentage
Pennsylvania$84,921,693$42,282,405$42,639,288100.8%
Michigan$58,762,835$26,947,290$31,815,545118.1%
New Jersey$114,788,726$84,152,035$30,636,69136.4%
Illinois$79,327,385$52,596,844$26,730,54150.8%
Nevada$71,972,000$48,312,000$23,660,00049.0%
Indiana$47,654,492$27,683,035$19,971,45772.1%
Virginia$48,337,037$30,160,385$18,176,65260.3%
Tennessee$36,920,000$22,908,000$14,012,00061.2%
Arizona$50,270,066$36,326,542$13,943,52438.4%
Iowa$19,746,266$6,556,218$13,190,948201.2%
NATIONWIDE TOTALS$723,335,769$446,890,754$276,445,01561.9%

The $276.4 million in increased revenue from October to November would have ranked 12th in the 42 months of the post-PASPA era as a standalone figure.

Parlay play continues to move revenue needle

By parlay wagering standards, October’s win rate of 15.1% in the sample size of seven states (New Jersey, Nevada, Illinois, Colorado, Mississippi, Delaware, and Oregon) that provide both handle and revenue for such wagers qualified as a good month for the betting public. The month-over-month growth of handle to $642.8 million was 22.6%, easily outpacing the 12.1% growth of gross revenue to $97.3 million.

It was, however, back to life and back to reality in November, as the combined win rate across those markets marked a 2021 high of 25.7% despite Delaware posting a loss of $1.3 million on those plays and having a nearly perfect inverse “loss” rate in this instance of -25.7%. Parlay revenue surged 44% from October to an all-time high of $140.2 million despite a notable 15.1% dip in handle to $545.6 million.

Much of the house success can be traced to New Jersey and Illinois, where operators collected close to $115 million in revenue from $429.3 million wagered, resulting in a 26.8% hold. Though Nevada does not generate anywhere near the handle on parlays as it does customary sports wagering, the house had a winning record in the Silver State, with a 54.8% hold on the $8 million bet on such plays. That is not a new phenomenon to the Las Vegas Strip and Nevada, as it was the second consecutive November that the win rate topped 50%.

But much like the house turned things around in November, there was a sign in the desert bettors may have turned momentum back their way to close 2021: The public posted a profit of nearly $1.9 million in parlay bets there in December, just the second time that happened in a month not affected by the COVID-19 pandemic.

Photo: Shutterstock

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