The expected seasonal slide in the US legal sports betting industry has officially added another state. On Tuesday, the Illinois Gaming Board released its May sports betting numbers and it became the 10th participating jurisdiction to report a dip in their May handle. Illinois joins Virginia, Michigan, Pennsylvania, Rhode Island and New Hampshire among others that experienced a drop in their monthly take.
While a dip in the handle is always a concern, Illinois still managed to maintain its standing as the second-most successful betting state in the nation. May’s handle represented the fifth straight month the state’s sportsbooks took in at least a half-billion dollars and made Illinois just one of two states to break the $500 million mark in both April and May.
It remains to be seen if Illinois will be able to maintain its top two spot on the list of US legal sports betting states. Current third-place state Nevada will start to benefit from a post-COVID boost in tourism and ultimately its retail betting sector and then there is the matter of Illinois returning to an antiquated in-person only requirement for its robust mobile scene.
Diving Into the Figures
According to PlayIllinois, the body that tracks the state’s regulated online gaming and sports betting market, sportsbooks took in $507.3 million in May. While reasonable, that figure is still a 5.6% drop from the $537.2 million reported in April and comes in as the lowest sports betting total for the state since December.
Revenues for the state’s sportsbooks reported an even sharper decline. Profits came in at $36.2 million, a decline of 17% from the $43.6 million in revenues from April.
Part of the reason for the sharp revenue decline was a drop in hold rate. Illinois sportsbooks’ hold in May was 7.14%, a full percentage point less than the 8.12% in April. The profits led to a still-respectable $5.4 million in taxes flowing to the state’s needy state and local coffers.
Mobile Take and Some Lifetime Figures
In one of the more head-scratching moves, Illinois Governor Pritzker ended the state’s COVID-forced temporary remote sign-up procedure for the state’s robust mobile betting platform. In April, the state returned to a more constrictive, antiquated in-person only requirement that is bound to have a negative effect on the state’s mobile providers.
Despite that, during the first full month of the return to in-person only sign-up, Illinois mobile sports betting providers were still responsible for 95.1% of the state’s overall handle. That is just a slight drop from 95.5% in April.
May’s legal sports betting figures have shed light on the impressive lifetime tax contributions from the Illinois legal sports betting scene. With May’s $5.4 added in, Illinois sportsbooks have contributed an impressive $31.1 million to tax programs in the state in 2021 and $53.3 million since launching in March 2020.
Hanging On
The Illinois legal sports betting scene has been impressive indeed, but they may just have peeked in terms of their standing in the overall legal sports betting scene. The month-to-month gap between them and Nevada slipped from $79.3 million in April to $29.7 million in May, putting their place at #2 on the list of bet-friendly states in peril for a few reasons.
Firstly, Nevada, the current #3 is expecting a post-COVID spike in tourism and ultimately sports betting activity. Secondly, the seemingly unnecessary return to an in-person mobile sign-up requirement could deal a blow to what is an overwhelmingly popular mobile betting scene.
BetMGM is expected to launch in the state in the next couple of months but expectations are being tempered by the in-person policy.
“A fresh infusion of operators has the potential to eventually lift the ceiling for the market,” Joe Boozell, an analyst for PlayIllinois.com said. “But until online registration returns to the state, new operators will remain at a permanent disadvantage. And that will blunt any boost the market would ordinarily get from new sportsbooks.”
Going Forward
The Illinois legal sports betting scene has been impressive. There is no reason to think that that trend won’t continue. But remaining number two in the race to be America’s top sports betting state may be a bit of a stretch.
“It’s been a mild surprise that Illinois has managed to fare as well as it has through the first two months of what is typically the offseason for sports betting,” said Jessica Welman, an analyst for the PlayUSA.com Network, which includes PlayIllinois.com. “In-person registration requirements will cap future growth. But the results in April and May do show just how active and engaged Illinois bettors have been.”
The gap is already closing between Illinois and Nevada. In April, the Prairie State was $79.3 million better than Nevada. In May, that number was just 29.7 million. With people flocking to Las Vegas and Reno, expectations are that Nevada will reclaim the second spot before too long.
In the end, Illinois will continue to be a major contributor to the broader US legal sports betting scene. After May, and with Illinois’s contributions, the national year-to-date handle stands at just over $20 billion – just $21.5 billion was generated in all of 2021.
It is expected that $500 million per month will continue to be the low-end bar for Illinois going forward and that the Prairie State will remain one of the true elite sports betting jurisdictions.
Calculators
