The first four months of FY2023 revealed that sports betting is picking up steam in the Hawkeye State, but casino gambling revenue has lagged from last year.
Sports Betting Gaining Popularity
Iowa was one of the first states to launch mobile sports betting in the post-PASPA era, having gone live in August 2019. After initially requiring customers to register for an online sports betting account at one of the state’s casinos, that mandate was eliminated in 2021 and now digital signups are allowed.
There are 17 mobile sportsbooks operating in Iowa, and October’s report released by the Iowa Racing and Gaming Commission (IRGC) stated online sportsbooks handled $231.79 million of the $255.29 million in sports bets accepted. Retail sportsbooks took in the remaining $23.5 million of the betting handle.
That rather cavernous gap is in keeping with the nationwide average of roughly 90% of the wagers being processed through mobile sports betting apps. In October, 90.8% of the bets in Iowa came via the digital realm due to, among other reasons, convenience. Customers would prefer to make a wager on their mobile device or PC rather than trek to the nearest brick-and-mortar sportsbook housed within a casino.
Betting Trends and Revenue Breakdown
Compared to last October, this year saw an increase in the overall sports betting handle of 6.91% and a 3.88% increase over September 2023. Revenue from the previous month remained largely unchanged despite the uptick in the betting handle due to a hold, or win rate, that dipped from 9.7% in September to 9.4% in October.
Collectively, the sportsbooks generated $1.6 million in taxes to the state, which was just about the same as in September due to the slightly lower win rate.
As for the individual sportsbooks, Boston-based DraftKings held its dominant position, generating a handle in October of $93.9 million which was up 1.3% from September.
Meanwhile, FanDuel’s handle spiked 18.8% from the previous month to $61.1 in accepted wagers. Caesars Sportsbook rounded out the top three with $30.4 million in wagers, down from $32.4 million from the month before.
Casino Gambling Shows Decrease
The October gaming report issued by the Iowa Racing and Gaming Commission also revealed casino gambling had taken a bit of a tumble compared to the first four months of fiscal year 2023. During the months of July, August, September, and October FY2024, the state collected $105.2 million in casino gaming taxes, a decline of $5.9 million from the same period last year.
As for October, the casinos reported $136.31 million in adjusted gross revenue (AGR), a 6.48% decline from last October’s numbers and a 5.5% reduction from September 2023 which reported $144 million in AGR.
Specifically, table games took the biggest monthly hit, down over 14% from the previous month, generating $12.76 million compared to September’s $14.84 million. The revenue from slot machines did not go unscathed either, showing a 4.52% drop from September’s $129.40 million to October’s $123.55 million.
According to reports emanating from the Revenue Estimating Conference, gaming tax revenue for Iowa is projected to be $318.5 million, which would translate to a $24 million decrease over FY2023.
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