Iowa Online Sports Betting Market Smaller With Unibet Departure

At the end of October, Unibet announced it was not renewing its Iowa online sports betting license. Kindred, Unibet’s parent company, said it’s planning to be out of Iowa by the end of the calendar year.

Unibet’s Iowa casino partner is Harrah’s in Council Bluffs. Kindred chief executive Henrik Tjärnström told iGaming Business: “We’re going to reduce that to six when we leave Iowa and then increase it again to seven with Washington.

“We have reviewed the state footprint in line with our strategy to focus more on multiproduct states and have decided to exit Iowa now in the fourth quarter of 2022,” Tjärnström said during an earnings call in late October.

Unibet is second departure from Iowa online sports betting market

Kindred’s decision to pull Unibet from Iowa comes just a couple of weeks after Fubo Inc. announced it was closing its operations in Iowa.

Iowa Racing and Gaming Commission administrator Brian Ohorilko said Fubo told the commission the decision was “due to economic conditions.”

For smaller sportsbooks, the challenge to compete with some of the big industry names is an uphill battle. “It’s becoming more and more difficult,” Ohorilko told PlayIA in October.

Ohorilko attended the Global Gaming Expo (GGE) and said there was a large discussion on the direction of sports betting. He told PlayIA that at the conference, it was stated that FanDuel and DraftKings have 60% of the market share nationally.

That number jumps to 70% when you add BetMGM, he said.

It’s tougher now more than ever for a startup or non-household name to compete with these sportsbooks, which have deeper pockets for player acquisition.

Ohorilko told PlayIA:

“Specifically, that is the dollars that are used to entice new customers to download their apps. It was reported and discussed quite a bit that it’s very difficult for companies to compete against larger sports operators.

Some of those industry experts had predicted that we may continue to see some market consolidation with the sports industry and that we may also continue to see some companies get out of the business.”

Still, Kindred remains confident that Unibet will be able to compete in the future. “With our current setup, we see some positive signs of development and we’re expecting those to become more visible going forward,” Tjärnström said.

“Mattress Mack” helped Unibet IA post a strong handle in July

The first month of FY23 started off about as well as it could for the sportsbook. Unibet posted $1,060,375.57 in revenue in July, which topped all but four sportsbooks: Caesars, FanDuel, DraftKings and Betfred.

Unibet even posted higher revenue in July than BetMGM ($791,528.50).

But there was a catch. One huge bet skewed the numbers at both Unibet and Betfred in Iowa.

They came from Houston furniture magnate Jim “Mattress Mack” McIngvale.

McIngvale runs a promotion for customers who spend more than $3,000 at his store. In Iowa, McIngvale found two sportsbooks to take his bets on the Astros to win the World Series.

If the Astros won, the furniture customers get their money back.
If the Astros lost, McIngvale still keeps the increased sales from customers who took advantage of the promotion.

From there, McIngvale had to find sportsbooks to take bets on the Astros. He found two willing partners in Iowa, took a private jet and arrived in the late-night hours of July 22. McIngvale bet $1,050,000 at Unibet IA and $1,010,000 at Betfred IA.

“All these private jet terminals are glorified gas stations. So as they fuel the jet backup with jet fuel, you can go into their lobby and I can bet right there. So I bet right there at the Des Moines airport. And it was great. People at both Unibet and Betfred were on the ball and I got it done in a hurry.” he told PlayIA back in July.

As we now know, Mattress Mack and his customers got the best of Unibet and Betfred when Houston won the World Series in six games on Saturday, Nov. 5.

“The furniture business itself slowed down tremendously. So having this promotion with the Astros has really helped our business.”

Year-to-year numbers show sharp drop off in Unibet handle and revenue

After the big bet, though, Unibet’s handle figures tumbled to $124,473.10 ($12,050.75 in revenue) in August. Then, that handle rose about $40,000 to September’s figures.

Unibet posted a handle of $165,960.86 and $16,330.73 in revenue for September in Iowa. Since Fiscal Year 2023 started in July, the sportsbook generated $1,088,757.05 in revenue.

For context, that number is about $55,000 more than the Barstool Sportsbook’s FY23 revenue to date.

Even though September’s numbers increased month-to-month from August, it was a sharp decline from September 2021. That month, Unibet totaled a handle of $516,135.98 and an internet net receipt of $34,659.58.

September 2022 compared to September 2021, there’s an $18,328.85 decrease in revenue and a $350,275.12 decline in the handle. Tjärnström said:

“We have been in an investment position across our state footprint and it will take some time, a few years to achieve profitability. We’re expecting the contribution from 2022 to be negative from 2021, but then in 2023 we’re reducing those losses and by 2026 we’ll be breakeven across our current state footprint.”