While numbers are cold, hard facts, arriving at a final set of them includes a fickle set of variables. That was the case for sports betting across the United States in May after reviewing said numbers for the 20 states and legal jurisdictions where wagers are currently being accepted.
All told, bettors wagered just shy of $3.72 billion in May, representing an increase of 0.4% from April, when the total narrowly cleared $3.7 billion. Operators claimed $255 million in revenue for May, a decrease of 4.2% from the previous month’s haul of $266.1 million. As a result, the monies that poured into state tax coffers also dipped slightly to about $39.4 million, 1.2% lower than April’s amount of $39.8 million.
The short explanation for the slight drop was bettors doing slightly better in May than they did in April. The hold nationwide was 6.86% in May compared to 7.19% in April. Neither win rate is notable considering the industry standard is 7% — in fact May’s hold ranks 18th of the 36 months covering the post-PASPA era. It is also the closest monthly hold to the current all-time hold of 6.9% — but that 4.6% “improvement” by bettors from April to May was enough to swing the revenue and tax totals to a month-over-month dip despite the increase in handle.
May handle notes
After supplanting Nevada as the nation’s leader in post-PASPA handle in April, New Jersey is now about the business of expanding that gap between No. 1 and No. 2. The alternate story concerns the Garden State simply building a margin that will be overtaken by New York‘s eventual expected dominance should the Empire State ever sort out adding mobile sports wagering to its underwhelming retail component.
All the same, it is New Jersey’s lead to build, and it has started doing so in impressive fashion. The overall gap between New Jersey and Nevada is now more than $570 million, and the nearly $336.7 million that separated the two states in May represented the second-largest monthly spread since January 2020. It also marked the sixth time in the last seven monthly reports that New Jersey outpaced Nevada by at least $200 million in handle after running up $814.3 million for May.
|Month||New Jersey Handle||Nevada Handle||Difference|
Nevada took a jab to the ego for a second straight month from Illinois, which stubbornly held onto the No. 2 spot nationally with nearly $507.3 million in handle. It also extended the state’s run of half-billion dollar handles to five months while it lurks less than $7.3 million behind the Silver State for second in 2021 sports wagering handle.
But it’s not all doom and gloom for Sin City and beyond in Nevada. May’s handle of $477.6 million was a 4.3% increase from April, and the gap between the state and Illinois shrunk from $79.3 million in April to $29.7 million in May. Additionally, on a more optimistic note specific to sports betting in Nevada, retail handle climbed 11.8% month over month to $179.7 million, a sign that one of the tourist meccas of the United States is indeed bouncing back and drawing visitors post-pandemic.
Back east, Virginia was welcomed into the $1 billion handle club after reporting a handle of nearly $227 million for May. The “three comma club” now has 11 members, with Virginia being the fastest “new” state of the post-PASPA era to reach the benchmark. It did so in just four months and 11 days. It also became the fifth state in 2021 to reach $1 billion in overall handle, joining Tennessee (April), Michigan (April), Iowa (February), and Mississippi (February).
Of those 11 states, only Mississippi has done so without the aid of mobile wagering. For those curious: West Virginia has the inside track on being the next state to reach $1 billion, having started June needing more than $126.6 million. And the final note on “Billions” without referencing the Showtime series: Eight states have cleared $1 billion in handle for 2021, and those eight states (New Jersey, Nevada, Illinois, Pennsylvania, Indiana, Michigan, Colorado, and Virginia) account for 86% of the overall handle.
May revenue notes
— Chris Altruda (@AlTruda73) July 8, 2021
While the month-over-month falloff in revenue was slight in terms of dollars ($11.1 million), it obscures the fact only four states reported an increase in adjustable gross operator revenue month over month. Of the four, West Virginia had the highest percentage increase, climbing 51.7% to more than $3.3 million, while Virginia posted the largest increase in dollars, an improvement of more than $3.7 million to nearly $23.2 million.
Pennsylvania and New York were the other states to post gains compared to April, while Illinois had the sharpest drop in terms of dollars, with the $36.2 million generated in May almost $7.4 million less than the $43.6 million reported in April. In addition to the 5.6% dip in handle month over month, bettors across the Prairie State knocked down the hold to 7.14% in May compared to 8.12% the previous month.
Illinois was not alone in a revenue dip exceeding $1 million from April, as Colorado, Indiana, Iowa, and New Jersey all had notable declines. There was some shuffling in rankings by revenue behind New Jersey and Illinois for May, but no state moved more than one place in either direction. Montana did not finish last nationally for the first time in 2021 in monthly revenue, as its small decline in May allowed it to sneak past Arkansas for 19th among the 20 jurisdictions reporting.
The taxman cometh
Sports betting tax revenue usually begins with Pennsylvania and its 36% tax rate, and May was no different as it accounted for nearly one-quarter of the $39.4 million generated. The correlation between the states with the largest handles and the most tax revenue continued, for the most part, as Pennsylvania, New Jersey, Illinois, and Nevada combined to account for close to 60% of May’s tax receipts.
Oregon, which conducts its sports betting through the state lottery, continues to be the biggest outlier. It has ranked no worse than ninth in any of the first five months of 2021 — a feat easier to accomplish considering the state keeps 100% of the revenue — and the $10.3 million it has collected through the first five months ranks fifth overall, just ahead of Nevada. It should be pointed out that Nevada and Iowa have the nation’s lowest tax rate on sports betting revenue at 6.75% and rank sixth and 13th, respectively, in tax dollars collected.
Five sports player salaries higher than New York’s handle
It really might be coming home 😱
KANE SLAMS IT HOME AFTER HIS PENALTY WAS SAVED! pic.twitter.com/msiI9kyMcF
— ESPN FC (@ESPNFC) July 7, 2021
In continuing the vigil for the first signs of progress New York will make toward having mobile wagering, a now-monthly FOIL request to the New York State Gaming Commission for its handle provided the reply of slightly more than $13.8 million generated in May. The Empire State held steady at 16th in the monthly rankings, edging out the nation’s capital by $37,916, and its handle was less than half that of 15th-place Oregon ($27.8M).
There are countless ways to tweak all-impressive New York about its not-so-impressive sports betting handle, and May’s report features random annual player salaries (courtesy Spotrac) higher than New York’s total:
- San Diego Padres outfielder Wil Myers, who is making $22.5 million this season and currently hitting .252 with 10 homers and 35 RBIs.
- Charlotte Hornets center Cody Zeller, whose average salary for 2020-21 was $14 million and who averaged 9.4 points and 6.8 rebounds.
- Detroit Lions defensive end Trey Flowers, whose 2021 base salary is $14.375 million and who has never recorded more than 7.5 sacks in any season. In Flowers’ defense, he was limited to seven games in 2020 due to a fractured forearm.
- No NHL player’s annual salary exceeds New York’s handle for May, but Edmonton Oilers center Connor McDavid is definitely worth more than the $12.5 million his current deal averages. Just saying.
- In “honour” of Sunday’s European Championship final between England and Italy, Tottenham Hotspur striker and English talisman Harry Kane’s 2020-21 salary was approximately $14.3 million using the current exchange rate.
If football does indeed come home Sunday at Wembley Stadium and the Three Lions end 55 years of hurt to claim their first major title since the 1966 World Cup, New York may have to work harder to keep up with Kane, whose expected move from the Spurs this summer will likely come with a sizable pay raise as the toast of a nation.
Photo: RomanR via Shutterstock