States that have legalized sports betting are reporting a boom in wagering for September, which just so happened to be when the NFL and college football kicked into high gear.
The Michigan Gaming Control Board released numbers on Thursday showing the state's online sportsbooks took approximately $354.3 million in wagers last month.
When combined with the $32.5 million in bets taken by Detroit's three casino-based books, the state's overall sports-wagering handle for September was $386.8 million, or just over 85 percent more than the $208.6 million in action reported for August.
Internet sports betting only began in Michigan back in January, while the Detroit casinos were allowed to start retail sports betting in March 2020.
Yet, the Indiana Gaming Commission reported a similar phenomenon recently. According to the regulator, the state's sportsbooks took $355.4 million in (mostly online) wagers last month, which was a nearly 65 percent increase over the $215.6-million handle for August.
This September’s sports-betting action for Indiana was also a 71 percent jump in wagering over September 2020’s $207.45 million in handle.
What’s more, the amount bet on football last month in the Hoosier State was approximately $148.6 million, about three times as much as the $48.4 million wagered a year earlier.
In the same vein, the Iowa Racing and Gaming Commission reported its sports-betting figures for September 2021 recently, with the Midwestern state’s sportsbooks taking $210.4 million in wagers. That was almost double the $108.4 million in sports bets in August in the state, as well as a more than 190 percent increase over September 2020’s $72.4 million in handle.
While Iowa does not break out the amount bet on various sports, there was one major difference between September and August — the former had a full month of NFL and college football to watch and wager on. The huge in-state rivalry game of Iowa versus Iowa State was played in September as well, with the Hawkeyes winning and continuing their march up the college football rankings.
Football's back, and so are bettors
The latest numbers offer further proof that the return of football and the spread of legal sports betting across the United States are helping fuel record-breaking amounts of action at sportsbooks. Operators are also offering generous sign-up bonuses and promotions that are driving further betting activity.
Meanwhile, bettors in some states are seeing the number of sportsbooks they have to choose from growing as the market matures. Indiana, for instance, had results from nine online sportsbooks included in its September 2020 figures. In September 2021, there were 13 books included, such as new additions like Betway.
Vancouver-based GeoComply Solutions Inc. reported earlier this month that it processed 330 million geolocation transactions in 18 states and the District of Columbia during almost four full weeks of NFL football. The company, which is relied on by nearly all of the U.S. online sports betting industry, said this was a 122 percent increase over the first four weeks of the 2020 NFL season.
Those numbers follow research released in early September by the American Gaming Association that estimated a record 45.2 million Americans, or approximately 18 percent of the adult population of the U.S., plan to wager on the NFL this season. That was up 36 percent compared to a year earlier.
“With more states poised to come online in the coming weeks and months, we expect growth will continue to accelerate through 2021 and 2022,” said Lindsay Slader, managing director of gaming at GeoComply, in a press release.
The record-breaking growth of sports betting volumes from the first NFL weekend has carried over to the first four weeks of the season, with 330M transactions.
— GeoComply (@GeoComply) October 4, 2021
Arizona solidified its place as the fourth largest market. More: https://t.co/qHS5mfSuYr #NFL #SportsBetting
But the increase in action for sportsbooks during football season is not a totally digital story.
In Michigan, retail sports betting took off in September. The handle for the three brick-and-mortar books in Detroit last month was approximately $32.5 million, which was almost double the $16.3 million in action reported for August, according to the Michigan Gaming Control Board’s numbers.
However, the increase in handle for sportsbooks that is being helped by football season is not necessarily translating into more revenue for all operators, especially online.
Iowa's net revenue from sports betting overall in September was $5.7 million, which on a handle of $210.4 million works out to a win percentage of 2.7 percent. Both revenue and hold were down from August, when the state's sportsbooks earned $6.6 million in net receipts and had a win percentage of 6.1 percent.
Although most of the wagering in the state was done online, retail handle and net revenue for Iowa sportsbooks in September were $23.9 million and $4.2 million, respectively. That works out to an unofficial win percentage of about 17.6 percent for brick-and-mortar books in the state, which dwarfed the 0.8 percent hold of online operators.
Spending spree
Indiana's online and retail sportsbooks managed to keep more for themselves last month, earning about $33.9 million in revenue after paying out winners and making adjustments. The adjusted revenue and the 9.5 percent hold that it worked out to topped both the $16.5 million in receipts and approximately 7.7 percent hold for August.
In Michigan, the increase in retail sportsbook handle was also matched by an increase in total gross revenue, which rose to approximately $3.5 million in September from $1.6 million in August. On a handle of $32.5 million, the hold for the brick-and-mortar books was about 10.8 percent.
However, on the online side, Michigan operators generated nearly $23.7 million in revenue, or a win of about 6.7 percent. Furthermore, when adjusting for things like free-play credits, total gross sports betting revenue fell to just $17,399.43.
The last number suggests that sportsbooks are trying to acquire customers by offering players plenty of incentives. And while operators may be able to afford that now, they may eventually pull back, especially considering the big sums they are also spending on marketing.
"All you need to do is watch an NFL game to see just how intense that battle is for acquisition," FanDuel Group CEO Amy Howe recently told CNBC.
Howe said that FanDuel had spent $300 million in the first half of the year and $1 billion to date on marketing.
"I think there's only a certain number of companies that are going to be able to sustain that level of spend," she added.
