The in-person registration requirement for online sports betting in Iowa expires in 100 days.
With online sportsbook registration coming to Iowa bettors on Jan. 1, 2021, the question of whether the mandate was the right move becomes pertinent.
By one measurement, the answer seems to be a firm no. At the same time, there were extenuating circumstances that the state couldn’t have foreseen when it enacted the face-to-face registration mandate.
Why delaying online sportsbook registration didn’t pay off
To accurately assess this situation, it’s appropriate first to eliminate the variables. Sports betting handle figures from the past 13 months aren’t of much use because the in-person mandate has been in place the entire time and the COVID-19 pandemic has had a dramatic effect.
It’s impossible to know whether more bettors in Iowa would have placed bets at legal mobile sportsbooks if online registration were in place. It’s also difficult to know how many more would have done so if the in-person registration requirement had not lasted as long.
However, measuring actual versus hypothetical registration numbers isn’t the relevant metric. That’s because the mandate had little to do with the registration process.
It had everything to do with the brick-and-mortar casinos in Iowa. They have been the dominant force in the IA gambling industry for decades. Therefore, any gambling expansion in the Hawkeye State was going to require their approval.
The face-to-face requirement was a concession to them. The casinos hoped that while bettors were on-site and registering for online sports betting, they would spend money at the casino. The numbers don’t show such an effect, however.
This table shows the adjusted gross revenue and admissions for all Iowa casinos for seven months before legal sportsbooks went live in the state.
|Adjusted Gross Revenue
This table shows the same figures from August 2019 through February 2020. There are other factors at play that provide important context; however, the raw numbers are similar.
|Adjusted Gross Revenue
One thing that’s crucial to remember when comparing these numbers is that correlation does not equal causation. These small rises in adjusted gross revenue and admissions could be attributed to a number of factors, not just the presence of legal sports betting alone.
Another important fact is that only two of the months in these samples are year-over-year comparisons. That’s relevant for the casino industry because some months tend to be better than others historically.
Casinos may have been better off with online registration
Still, increases of just 1.3% in average adjusted gross revenue and 4.8% in average admission are likely far less than casinos hoped for during the latter sample. It appears that forcing bettors into casinos to register did not make a significant difference.
It’s also fair to speculate whether casinos would have seen just as much, if not more, of a rise in revenue from online registration during the same period. Because IA law requires online sportsbooks to have facility partners, IA casinos would have shared in the spoils of untethered registration.
Online registration could have played a pivotal role for casinos from March to June. Throughout most of that time, IA Gov. Kim Reynolds ordered the closure of casinos because of the COVID-19 pandemic.
Because she also left the in-person mandate in effect, only people who had already registered could bet on sports during those months. Once again, it’s difficult to prognosticate how many more people would have registered for online sports betting if able.
Domestic sporting events were few and far between during that same time. Casinos likely would have appreciated any additional revenue from sports betting while they were unable to offer any other products, however.
A better measuring stick for the market in Iowa will become available after online registration begins. At that time, significant boosts in handle would suggest some Iowans have been waiting to wager on the legal market.
It’s telling that during a record month for sports betting handle in Iowa (November 2019), casino numbers were quite pedestrian. The in-person registration requirement did not boost casino fortunes.
If anything, that mandate only slowed the growth of legal sportsbooks in IA. Because casinos have been so integral in that industry so far, they’ve shared in the lack of spoils.