It All Adds Up: NCAA Tournament Leads To Record $4.6B Handle In March

March Madness proved to be the tide to lift all sports betting boats, setting yet another national record
It All Adds Up 2021 March
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There was little surprise March delivered a record sports betting handle for the seventh time in the last eight months as bettors across states that generate large handles were able to wager on NCAA tournament games for the first time — including four in the Midwest that missed out on the chance to do so last year due to the COVID-19 pandemic.

The $4.61 billion in wagers for March likely will stand as the high-water mark until September, when the juggernaut that is the NFL begins play. The next marquee sporting events are across the Atlantic: the all-English UEFA Champions League final between Premier League champion Manchester City and rival Chelsea takes place May 29, followed by the month-long, 32-nation UEFA European Championship across the continent starting June 11.

This summer looks to be merely the appetizer for bettors to whet their appetite to create a $5 billion handle in September with the overlap of the NFL, Major League Baseball, and college football. Add in the NFL’s glacial 180-degree turn and embrace of legalized wagering through its recent deals with Caesars, FanDuel, and DraftKings, and you have a formula to hit a number not even dreamed of less than one year ago.

Illinois makes a run at Nevada

For all the talk about Illinois Gov. JB Pritzker’s decision to let Executive Order 2020-41 lapse in early April, ending remote registration, it was the carveout banning wagers on in-state colleges from the 2019 Sports Wagering Act that took center stage in March.

While the state was represented by just two teams in the NCAA tournament, the selection committee put Illinois and Loyola of Chicago on a second-round collision course, and both teams advanced to set up the showdown. It is easy to note the interest that matchup generated in the state — on one side was the flagship university of Illinois and a legitimate national championship contender, on the other an upstart darling whose magical Final Four run just three years prior was still easy to recall — but difficult to quantify it in terms of actual handle numbers.

Illinois Gaming Board Administrator Marcus Fruchter provided a quality tease during the April meeting by disclosing the state accepted $176.8 million in wagers for the NCAA tournament, and that total came without one operator’s revenue report. He did not specify if that operator was mobile or retail, thus making any sort of extrapolation pure conjecture.

In the end, the IGB reported a handle of $260.4 million for college sports in March, which puts the actual number somewhere in between. For argument’s sake, let’s use the midpoint of $218.6 million for the NCAA tournament handle. Hollywood Aurora Sportsbook Manager Hemal Patel figured the Illini-Loyola game would have been good for a 15% bump in tournament handle had it been available, which would have pushed that total to just shy of $251.4 million if applied across the board to all operators.

That $32.8 million would have increased the overall March handle to $666.4 million, which would have been the 10th highest monthly all-time handle in the post-PASPA era and higher than Nevada’s best month of $659.4 million, in October 2020. The actual handle of $633.6 million was good for 12th overall, though New Jersey‘s handle of nearly $748 million in April has since dropped it a peg.

The absence of the game made the betting heart grow fonder, and it also may have provided momentum for Rep. Mike Zalewski’s bill to strip the college carveout to be passed during the current legislative session that runs until the end of the month. If that were to take place before the recess, it could be in place for college football season, which would give Illinois bettors access to Illini and Northwestern games for Big Ten play as well as Northern Illinois in the Mid-American Conference.

Illinois’ numbers for March are also impressive considering there is still upside to tap between both the college carveout and the low number of mobile operators. Barstool Sportsbook made its mobile debut, and the newcomer generated $47 million in handle in three weeks. A different argument can be made that a March 1 launch instead of a March 11 start would also have resulted in Illinois beating out Nevada for the No. 2 spot.

And while Barstool will prove formidable, it is only the sixth mobile operator in the state. Pritzker’s decision to let his executive order lapse puts BetMGM and Unibet in a limbo of sorts. Should the IGB approve either or both without remote registration, neither will draw a substantial amount of sign-ups since Chicago-based bettors now must make multi-hour drives to access those respective apps.

The Midwest and rookie states represent

StateHandlePercent of National Handle
New Jersey$859,617,96118.64%
Nevada$640,781,75913.90%
Illinois$633,614,95713.74%
Pennsylvania$560,259,18112.15%
Michigan$383,681,8928.32%
Indiana$316,717,7626.87%
Virginia$304,066,2456.59%
Tennessee$205,900,0004.47%
Colorado$300,990,8406.53%
Iowa$161,439,5613.50%
New Hampshire$55,800,0961.21%
Mississippi$50,546,8861.10%
West Virginia$42,751,2300.93%
Rhode Island$38,583,9190.84%
Oregon$24,054,9600.52%
Washington D.C.$15,275,2150.33%
Delaware$6,666,1150.14%
Arkansas$5,947,4260.13%
Montana$4,093,4440.09%
TOTALS$4,610,789,449

Illinois and Michigan were similar in the sense they had just begun taking bets days before COVID-19 shuttered casinos and the sports world. The 2020 NCAA tournament would have been the first as well for both Indiana and Iowa after they came to market in the second half of 2019.

Unfortunately, none of these four states have a detailed breakout for what the NCAA tournament specifically generated for handle, but the quartet more than pulled its weight with a combined handle of nearly $1.5 billion. Michigan and Iowa set monthly records with $383.7 million and $161.4 million, respectively, while Indiana’s handle of $316.7 million ranks second all-time for the state.

Between the pent-up demand for wagering on the NCAA tournament and large states getting their first taste of March Madness betting, it is easy to see why the March handle was 5.7% higher than the previous record of $4.36 billion set in January and up 15.3% from February. True rookies Virginia, Colorado, and Tennessee posted a combined handle of $811 million, with both Virginia and Colorado clearing $300 million.

New Hampshire, which also had NCAA tournament betting for the first time, had an increase of more than six-fold compared to March 2020 as its $55.8 million ranks second in its monthly handle totals.

What about the revenue?

StateFebruary 2021 Taxable RevenueMarch 2021 Taxable RevenueDifference in DollarsPercent Change
Arkansas$655,356$807,091$151,73523.2%
Colorado$10,444,810$20,365,119$9,920,30995.0%
Delaware$679,021$1,104,860$425,83962.7%
Washington D.C.$1,333,019$1,867,034$534,01540.1%
Illinois$35,393,768$44,317,702$8,923,93425.2%
Indiana$16,955,904$26,350,639$9,394,73555.4%
Iowa$7,708,148$13,454,158$5,746,01074.5%
Michigan$9,395,292$21,951,244$12,555,952133.6%
Mississippi$4,606,840$5,237,031$630,19113.7%
Montana$495,957$587,916$91,95918.5%
Nevada$31,846,000$39,344,000$7,498,00023.5%
New Hampshire$1,787,930$4,254,732$2,466,802138.0%
New Jersey$46,213,864$60,755,472$14,541,60831.5%
New York$1,153,276$1,845,685$692,40960.0%
Oregon$2,684,777$1,374,377($1,310,400)(48.8%)
Pennsylvania$16,379,807$29,352,345$12,972,53879.2%
Rhode Island$1,555,824$3,976,140$2,420,316155.6%
Tennessee$13,000,000$18,000,000$5,000,00038.5%
Virginia$12,238,780$26,573,877$14,335,097117.1%
West Virginia$3,927,551$3,889,477($38,074)(1.0%)
TOTALS$218,455,924$325,408,869$106,952,94549.0%

Yes, handle is all well and good, and it should be ticking higher as more states legalize and operators launch in those states. But with handle (except in New York, which does not disclose it) comes the revenue reports that provide snapshots of how much money states are collecting in tax receipts.

In terms of operator revenue, the $325.4 million of taxable revenue in March was the second-highest of the post-PASPA era, behind only the $360.7 million in January. It was the third month operators generated at least $300 million in taxable revenue, with all three occurrences taking place since last November.

The biggest difference from January to March was the hold. Sportsbooks had a solid January with a win rate of 8.19%, but in March, it was a pedestrian 7.02% — barely above the 7% industry standard. It was, however, significantly better than the 5.43% hold in February, as operators had a month-over-month increase of 49% compared to February’s $218.5 million.

The operator revenue resulted in state tax coffers receiving nearly $44.4 million, which was barely enough to edge October’s $44.2 million for the third-highest monthly total in the post-PASPA era.

So what now?

If early reporting in April is any indication, March’s record handle — and by extension the January revenue record — appears safe until at least September. Of the first eight states to provide reports, only Oregon has shown a month-over-month handle increase, and that uptick was less than $1.3 million.

Though New York and Arizona have legalized sports wagering, the goal for both is to be operational by football season, which means the number of states currently accepting wagers likely will remain at 20 throughout the summer. After the Euros comes the Olympics (maybe), which will mark the first time the Summer Games are available for legal U.S. wagering beyond Nevada.

Whether the Tokyo Games take place and draw widespread betting or are just a novelty act to break up the dog days of July and August is yet to be determined, but it also will provide tens of hours of primetime advertising to promote the upcoming NFL season. That, of course, will filter down to sportsbook operators — especially ones now able to promote their official ties to the league.

Then the race for the $5 billion handle will officially begin.

Photo by Svetlana Lukienko/Shutterstock

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