The November report for Iowa sportsbooks is in, and it looks quite different. Iowa sports betting revenue was nearly $14.1 million less than November 2021’s figures.
Thanks to two massive payouts to famed sports bettor Jim “Mattress Mack” McIngvale, Iowa produced a revenue total of only $5,802,261. That stands as the lowest revenue figure since September of 2021, according to the Iowa Racing and Gaming Commission (IRGC).
IRGC administrator Brian Ohorilko told PlayIA. The year-to-year numbers show just how big of a hit the state took.
“This will be the first time we’ve had a material payout of this nature.”
Big payouts leaves 2 Iowa sportsbooks in the red
Earlier this year, McIngvale placed two $1 million bets for the Astros to win the World Series at Unibet and Betfred Iowa sportsbooks. At the time of his July bets, each wager boasted +500 odds.
He ended up winning and collecting $6 million from each sportsbook when the Astros won the title on Nov. 5. Ohorilko said:
“When we initially discovered that (the sportsbooks) had accepted a bet of that amount, that’s when we had some conversations. They indicated at that time that they were prepared, clearly understood what they were doing and were happy to accept that wager. We had verified that those payments have been made.”
The result? Both Betfred and Unibet posted negative revenue totals for the month. Betfred was -$6.03 million, while Unibet – which announced plans to leave Iowa this year – was -$6.28 million.
McIngvale won $75 million from his World Series bet on the Astros from various sportsbooks across the country. His famously large sports bet is a win-win, in his book.
Sportsbooks with significant losses can offset taxes
Both sportsbooks paid outs $6 million and were deep in the red for November. When any operator shows a loss for a particular month, it won’t pay state taxes. Ohorilko said:
“Whatever loss would still be left, that they would be entitled to offset revenues, they would do that in future months.”
The casino partners are the ones who pay taxes in Iowa. In the case of Betfred, its casino partner Grand Falls Casino in Larchwood will carry the loss.
“It’s quite likely that Grand Falls, due to the loss from Betfred, will not pay taxes in December or January until they start showing positive revenue again.”
Why did Mattress Mack place his bets with Betfred and Unibet?
The IRGC hasn’t been told the specifics behind McIngvale’s rationale for choosing these particular sportsbooks. But it’s a relatively safe assumption to believe Betfred and Unibet are two sportsbooks willing to accept a bet of that size.
“There is always the risk of carrying a significant loss,” Ohorilko said. “That’s why not every company will book a bet in the amount that we saw with these two wagers from Mattress Mack.
“Sportsbooks are not required to book any bet of any dollar amount. Sportsbooks can set limits and that’s how they control that risk.”
Will this loss have lasting effects on Betfred Iowa?
Ohorilko doesn’t think so, noting that Betfred “is a very solid company,” he said:
“They have a solid track record of compliance. We receive annual revenue reports and audits from their company. They’re in good financial position. I don’t expect any long-term ramifications from this.
Of course, we haven’t had any conversations, but one question could be does something like this chance their risk tolerance in the future? I don’t know the answer to that.”
More on Iowa sports betting November numbers
The Iowa sports betting handle totaled $247,476,283.51 in November, nearly a $9 million jump from the total bets seen in October.
Iowa bettors continued to prefer gambling online and on sports betting apps, too. The state’s online handle of $223.5 million far outweighed its retail handle of $22.9 million.
FanDuel proved to be Iowans’ favorite sportsbook in November, grabbing a handle of $6.1 million for the month. DraftKings ($4.37 million), Caesars ($2.99 million) and BetMGM ($1.51 million) were Iowa’s next most-popular sportsbooks last month.