Iowa’s First Year of Sports Betting Falls Short of Initial Expectations

Sports betting has been legal in the state of Iowa for a full year now and while it was greeted by enthusiasm and wagering, critics argue it wasn’t quite the “touchdown” they had hoped for.

That’s not to say the first year wasn’t a success, as there was over $400 million wagered during the first year. It’s just that sports betting wasn’t the runaway hit many had been banking on. Of course, much of this was out of the state’s hands as this hasn’t been a normal sports year for any league.

The Industry Started Out on a High Note

Looking back to last August, a full year ago, the industry certainly kicked off on a high note. There was excitement surrounding sports betting as casinos all over the state were open and welcoming people in. Fast-forward to 2020 and it’s been an entirely different kind of year.

In mid-March, 19 casinos in the state had to close their doors to the public and remain that way for 11 weeks. Additionally, there were very few live sports happening during that time. So, what started off as a big bang came to a screeching halt.

Thanks to a combination of factors, the casinos in the state reported a decrease in net proceeds by 20%. This made it the lowest revenue totals since 2006. If you look at the actual attendance levels in the casinos, they were the lowest numbers in almost 25 years – dating back to numbers posted in 1996.

Because there were so many variables that no-one could have predicted or anticipated it makes the first year of sports betting hard to truly gauge.

It also makes it difficult to project future revenue as it’s impossible to know how the lingering effects of this health crisis will continue to hit the industry. Additionally, it’s unclear as to how much interest there truly is moving forward in Iowa.

In other words, how much of the low revenues are due to circumstances versus lack of engagement and interest from residents of the state?

How Things Looked Before the Shutdown

As for how the numbers looked before the sudden stoppage, it was quite promising. In fact, the industry was just starting to hit its stride as the state of Iowa was potentially on track to generate $1.8 million worth in state tax revenue.

However, there are those who argue that the disappointing first year totals only have to do with the fact people need to visit a state-licensed casino in order to create a valid account.

Once that is completed, people can use the online betting and mobile apps for those particular casinos. The problem is that not many people were willing to make the trip in-person to a casino and even if they were willing to, the casinos weren’t open.

All eyes will be on the industry for the remainder of the year to see if it can rebound as expectations and projections for 2021 are now re-worked.