Iowa Sports Betting Providers Show Monthly Decline in October Betting Figures
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The Iowa Sports Wagering Handle for October, as reported by the Iowa Racing and Gaming Commission, came in at $238.8 million. However, this month saw the lowest operator hold in nearly two months, at 8%. Despite this, the hold rate still surpasses the typical industry standard of 7%. Notably, this was the lowest hold anywhere since Nevada reported a 3.9% hold for August.
While September's handle is yet to be reported in full from Illinois and Arizona, it's set to break records, with the current hold rate sitting at a staggering 12.1%. In contrast, October's hold was particularly low—the first among seven states reporting—and marked the end of a three-month streak of holds 10.3% or higher in Iowa.
In spite of a 24.7% dip from September's all-time high of $25.4 million, the $19.1 million operators earned in October ranked third over the last 39 months of wagering. October saw seven of Iowa's top 10 monthly revenue totals, with August, September, and October ranking in the top four.
Iowa's comparatively low 6.75% tax rate makes generating substantial receipts challenging. However, October's revenue was enough to contribute $1.3 million to the state coffers, marking the first time Iowa had back-to-back months with $1 million or more in tax receipts since it accepted its first wagers in August 2019.
October's decline in the year-over-year handle—from a then-record $280.9 million—may be part of a broader pattern. Handle numbers for Indiana and West Virginia also showed decreases compared to October 2021. This reduction could be due to economic pressures from inflation or sportsbooks scaling back on promotional offers, creating a tough start to the fourth quarter compared to the last three months of 2021.
Despite the overall revenue drop, there were several notable performances among operators. DraftKings reported an all-time high handle of nearly $78.4 million—the highest among any Iowa operator since Caesars Sportsbook accepted $112.7 million in wagers in January. DraftKings' handle was significantly higher than FanDuel's, which set an all-time high in Iowa of $50.1 million in handle, but finished second to DraftKings in revenue at $4.6 million due to a 9.2% hold.
Brick-and-mortar sportsbooks in Iowa showed a hold rate of 10.5% for October—the fourth consecutive month in double figures. Operators collected $2.7 million in revenue from $26 million wagered. However, there was some inconsistency, with two venues reporting losses and three finishing below the 8% overall hold. The top performer was Diamond Jo in Worth, with ahandle of $7.8 million and revenue of $1,016,594, marking a seven-figure total for the third time overall.
Enrichment Data: The lower sports wagering hold rates in Iowa and other states can be attributed to various factors:
- Increased competition among numerous sportsbooks drives bookmakers to offer more favorable odds and promotions, reducing hold rates.
- Volume growth can sometimes compress hold percentages as bookmakers balance risk.
- Promotions such as cashouts, risk-free bets, and enhanced odds stimulate betting volume, reducing immediate hold but increasing player engagement.
- Seasonal variations in sports events and betting interest impact hold rates.
- Iowa’s relatively low tax rate on revenue provides sportsbooks some flexibility to lower hold to maintain competitive odds.
In the announced Iowa Sports Wagering Handle for October, the state's sports betting market showed a significant decline from the previous month's all-time high, with operators earning a relatively lower hold of 8%, in contrast to the typical industry standard of 7%. This downward trend extended to other states such as Indiana and West Virginia, potentially due to economic pressures from inflation or sportsbooks scaling back on promotional offers, creating a challenging start to the fourth quarter.
Despite the industry-wide slowdown, there were notable exceptions, such as DraftKings, which reported an all-time high handle of nearly $78.4 million, showcasing that even in a difficult market, some operators can thrive through strategic wagers and promotional offers.
