Hawkeye State residents and visitors bet more and also won more money in November 2019 than they did the previous month. That is good news for handle but bad news for Iowa sports betting revenue.
Hawkeye State handle was up nearly $13 million from October to over $59.34 million for November. Revenue, however, took a nosedive from just under $5.66 million to only $3.59 million last month.
Peering deeper into the Iowa sports betting revenue totals
The growth of handle in Iowa month-over-month is a great sign. Handle grew by about $8 million from September to October. November saw even more growth.
Like in October, both sectors of Iowa legal sports betting grew month-over-month. Retail handle grew over $5 million in November while online betting action was up nearly $8 million.
For the third consecutive month, the state handle champ was the Prairie Meadows Casino and Racetrack. Of the $20.59 million in total handle collected, a whopping nearly $19.06 million or 92.56% of wagers came in via the online product.
Along with the rest of the state, however, actual revenue at the Prairie Meadows fell about 40% from October. While this is the first drop in win for Iowa sportsbooks, it’s no reason to be alarmed just yet. Ebbs and flows are normal in the business, and unless it becomes a trend, sportsbook operators shouldn’t be worried.
The two biggest impediments holding back legal sportsbooks in Iowa are outside of operators’ control. Those include weak population density and a flawed regulatory structure.
The two biggest challenges facing Iowa legal sportsbooks
The regulatory flaw, unfortunately, exacerbates the issue with Iowa’s weak population density. The in-person registration requirement, included as a concession to the state’s casinos and racetracks, is stifling the growth of the industry in Iowa.
While account registration is a one-time act, the necessity of traveling to a retail sportsbook to complete the process is a natural deterrent to Iowans betting at all.
The idea of a live registration requirement for an all-online product or service is unheard of in other industries. Consider how many fewer Amazon Prime members would exist if states required citizens to physically go to an Amazon office to register for those accounts.
Iowa’s fabric of small towns makes this requirement an even tougher sell. In 2013, 35 states had a stronger population density than Iowa. The long distances that many Iowa residents and visitors have to travel to complete account registration acts to dissuade participation in legal sports betting.
Not only does that foster continued use of illegal, offshore channels for sports betting, but it denies the state potential revenue too. As revenue fell by almost 37% last month, taxes fell by the exact same percentage.
There is help on the way, however. For the growth of Iowa’s market, it can’t come soon enough.
2020 and 2021 could be better days for Iowa’s market
In November, only nine of the state’s 19 operators offered mobile wagering. That could dramatically expand in 2020, starting with PointsBet potentially by Super Bowl Sunday.
In addition, the in-person registration requirement ends New Year’s Eve 2020. Starting on New Year’s Day 2021, Iowa residents and visitors can conduct all their sports betting business on mobile devices without stepping foot in a casino.
Until then, however, the Hawkeye State will continue to present challenges and limited opportunity for legal sports betting. The fact that the industry in the state has grown despite the obstacles is a testament to the demand for legal sports betting.