Bettors Slow House Roll With Nevada Body Blow

It All Adds Up August 2021

After an early summer of taking blows from sportsbooks nationwide, bettors finally returned fire where it hurts the house the most — Las Vegas — to claw back some winnings based on a nationwide look across the U.S. sports betting landscape for August.

First, the big numbers: Handle climbed 9.6% from July’s $2.8 billion to nearly $3.07 billion, the 10th-highest total of the post-PASPA era which began in May 2018. It was a 40% increase compared to August 2020, as handle reached $3 billion for the 10th time in the last 11 months. The $45.6 billion wagered since Aug. 1, 2020, when the sports schedule began operating as close to “normal” as the post-pandemic world has allowed, has accounted for 65.8% of the nearly $69.3 billion handle post-PASPA.

While handle rose, revenue dipped sharply. Gross sportsbook revenue did top $200 million for the 11th consecutive month, but the $217.2 million won by the house in August was the lowest total during that streak. It was 18.9% lower than July’s haul of $267.7 million but also a 71.6% improvement from August 2020, when operators collected close to $126.6 million.

For adjusted gaming revenue (AGR), as Pennsylvania, Michigan, Colorado, Tennessee, and Virginia allow a varying percentage of promotional revenue to go untaxed, the $36.2 million was the most since nearly $37.7 million was claimed in May. The result: AGR totaled nearly $181 million for August, the lowest since the $134.2 million generated in September 2020, and a 23.9% decrease from July’s total of $237.8 million.

When AGR goes down, state tax receipts also take a hit. State governments collected just shy of $28.4 million for August, the first time the number was less than $30 million since the $19.4 million that reached state coffers in September 2020. That said, state taxes have reached $321.6 million through the first eight months of the year, which is 33.7% higher than the pandemic-affected total of $240.5 million for all of 2020.

Taking the lumber to Las Vegas

Sometimes, timing is everything, and it holds true for summer sports betting since baseball is the main event. The monthly reports provided by the Nevada Gaming Control Board for the summer show a betting public actively engaged with wagering on the summer pastime, but in August, there was no backup from basketball to help the house.

Month and Year Nevada Baseball Handle
August 2021 $277,621,622
July 2021 $227,592,814
June 2021 $226,241,135
June 2019 $208,741,007

As the table above shows, there has been a monthly record for handle in baseball for three straight months in the Silver State. Fortunes have ebbed and flowed between bettors and the books: The public actually thumped the house harder in June than August, limiting the books to a 1.41% win rate as bettors won back all but $3.2 million of the $226.2 million wagered.

The house swung back and connected in July — a much larger win rate (8.35%) resulted in a nearly six-fold increase in revenue to $19 million, which was a high-water mark for baseball post-PASPA. August saw the “Joes” get off the canvas and knock the win rate back down to 3.7%.

When taking out June, that is the lowest monthly hold for baseball in-season (April through October) in Nevada since operators were limited to 3.24% in September 2018. The $50 million spike in baseball handle absorbed some of the month-over-month losses as baseball revenue in August reached eight figures, at nearly $10.3 million. With the books paying out close to $16 million in winning NBA bets, however, there was a downward swing of $20.9 million in basketball revenue compared to June.

The result? Nevada finished August just $14.3 million ahead, easily a low for 2021, as the previous worst month still generated $27.3 million in April. The overall 3.35% hold was the lowest unaffected by COVID-19 since a 2.94% win rate in January 2019, and it marked the first time state taxes failed to reach $1 million — discounting the pandemic — since that same month.

Mobile bettors in Nevada also extended the state’s streak of failing to reach the industry standard 7% hold since the NGCB began releasing that breakout in January 2020. In fact, the 2.93% hold on such wagers was the lowest recorded, but since mobile handle accounted for 69.3% of total handle at close to $296.5 million, the $8.7 million in revenue from those bets represented 60.6% of all operator profits.

Win rate drops for New England books

The baseball and basketball revenue swings in Nevada had a national ripple effect, especially considering the baseball handle of $277.6 million would have ranked fourth nationally behind New Jersey, Illinois, and Pennsylvania. The overall national operator win rate on gross gaming revenue in August was 7.0783%, the second-lowest of 2021 and also the closest on either side of the 7% industry standard of the post-PASPA era.

While New Hampshire and Rhode Island are in the bottom half of the handle rankings among the 19 states and District of Columbia offering sports wagering through August, both of them posting sub-5% holds marked a notable departure from their norms — when people from Massachusetts are not crossing the state lines to bet on Tom Brady in the Super Bowl.

The states combined to generate just $2.7 million in revenue from nearly $60.4 million wagered, a hold of just 4.51%. Removing Brady from the equation, as operators in both states failed to post a 5% hold in February when he led the Tampa Bay Buccaneers to the Super Bowl, the previous low holds in 2021 were 7.07% for New Hampshire in April and 9.8% for Rhode Island in January.

Both states had also posted higher respective individual operator revenue totals than their combined August total in every month besides February.

As New York turns

As the person who plays numbers nerd for US Bets, my tweaking of New York is equal parts love as a native Brooklynite and “agita” from the state making my job more difficult with the extra steps involved to acquire said sports wagering numbers. But I am also fair when it comes to my passive-aggressiveness and will point out the New York State Gaming Commission always has been prompt in fulfilling my Freedom of Information Law requests to obtain monthly sports betting handle from its four retail locations as the slow, inexorable march to mobile wagering continues.

So it was a great and pleasant surprise to see New York’s August revenue report for the four casinos include sports betting handle for the first time. The media always asks states for the geofenced sun, moon, and stars when it comes to breaking out these figures, and each step a state does take moving forward in this area is one that increases transparency and, in the long term, helps the industry.

With those niceties out of the way, it was the second straight month the Empire State deserves a lower-case “e”. The August handle totaled $9.1 million, the lowest of any month unaffected by the pandemic since the first full month of wagering following launch in August 2019. New York’s cumulative handle of $277.6 million is just $22,085 more than Nevada’s baseball handle for August.

In honor of the Major League Baseball postseason being in full swing, this month we feature one player from each of the four teams remaining with a 2021 annual salary topping New York’s sports betting handle for August, with all salaries courtesy Spotrac.

Drew Smyly, who won 11 games for the Atlanta Braves in the regular season but has yet to feature for the Braves in the playoffs, made $11 million this season.

The Los Angeles Dodgers have seven players with a higher annual salary than New York’s handle, with outfielder Justin Turner the least among them at $12 million per.

Over in the American League, the Boston Red Sox had only a quartet of players with eight-figure paychecks, but Nathan Eovaldi nearly doubled New York’s August handle with a $17 million salary in 2021.

While Jake Odorizzi came close for the Houston Astros to matching New York with his $9 million annual salary, shortstop Carlos Correa does get to make such a claim with a $11.7 million salary that is the team’s fifth highest in 2021.

Photo: Dale Zanine/USA TODAY 

Author: Wanda Peters