High gas prices and rising interest rates are putting the squeeze on American consumers — and on sports betting in Louisiana, as well.
In an update on Thursday, the Louisiana Gaming Control Board heard the state’s legal sports betting handle for June was approximately $132.4 million, about 22% lower than it was in May. Retail sportsbooks accepted $18.7 million in wagers during June, while online sports betting accounted for $113.7 million in action.
Total proceeds from sports betting were around $10.65 million for the month, or a hold of 8%, and taxes owed to the state were approximately $1.5 million. Both figures were down from May, when sports betting-related revenue was approximately $25.3 million and taxes paid were almost $2.8 million.
Louisiana Gaming Control Board Chairman Ronnie Johns said he had been talking to casino operators over the past few weeks and that they had voiced some concern to him, which was mostly about the state of the economy.
“They attribute a lot of this to the price of gasoline, to high interest rates, to the rate of inflation, just the whole state of the economy right now and only so many discretionary dollars to go by,” Johns said during a meeting of the board on Thursday.
Last week, for instance, news broke that U.S. consumer prices were up 9.1% compared to a year earlier, the fastest pace of inflation since the early 1980s. However, Johns also said the state’s sportsbooks were doing relatively well and that they hoped to see an “uptick” in their business going forward.
“[The] month of June is traditionally a very, very slow month for sports betting across the country,” Johns added. “So no major events that are really going on. But with college and pro football coming, starting in late August, and the World Series coming in the fall … I think we're gonna see some major events and some significant activity.”
Early innings still
Legal sports betting launched in Louisiana last fall, so there is not much June's downturn can be compared against. More broadly, though, economies are staggering under the weight of rising prices and interest rates, and fears of a recession are looming over the gaming industry.
FanDuel CEO Amy Howe said last week during a conference in New Jersey that it would be "disingenuous" for anyone to say they were not concerned about the economy. Yet, Howe also noted it is still relatively early days for the legal sports betting industry in the U.S.
“And so the honest truth is I don't know that we know how exactly the inflation is going to impact us,” she said. “What I can tell you is right now the fundamentals of our business are still very strong.”
FanDuel is one of the seven online sportsbooks that are currently live in Louisiana. The bookmaker's CEO added that they are keeping a close eye on the economic situation, but that since they and consumers view sports betting and online gaming as a form of entertainment, it will be important to ensure bettors are spending within their limits.
“And that limit may come down during a recession,” Howe said. “And that's a big part of our responsibility and obligation as an industry leader, is to make sure that we can give consumers the right tools to manage through that, whether it's going to be a recession at all.”
