DES MOINES — August was likely the calm before the storm for sports bettors in Iowa.
Iowans got a brief taste of college football last month, which helped boost legal sports wagering to $108.42 million, according to data issued Monday by the state Racing & Gaming Commission. But the main course of full-blown betting on college and professional sports this month is expected to generate a new spike in Iowa’s gambling activity, officials said.
“We did see a bounce back in the month of August,” said Brian Ohorilko, commission administrator. “What’s unknown is what we can expect in the fall this year once we have a full slate of activity. There are still many things that are unanswered. It’s hard to know where our market will settle.”
Currently there are 13 online sportsbooks operating in Iowa with two more to launch later this month, meaning the market will stay “very, very competitive” with customers being lured by a barrage of advertising offering sign-on bonuses and incentives.
August represented the first month-over-month gain in betting volume since March’s record-setting month that hit $161.44 million in the throes of the college basketball tournament, according to state data. Since July 1, the sports-wagering handle in Iowa stands at $997 million.
“Futures betting and a handful of college games are enough to move the needle. That’s how important football is to the sports betting industry,” said Eric Ramsey, analyst for the PlayUSA.com Network, a website that tracks the Iowa gaming market. “August is a precursor for what should be the busiest stretch of the year. Optimistic projections for the last four months put the state past $1.7 billion in wagers for the year.”
Last month’s $108.4 million sports betting handle followed a brief down period that saw wagering slump to $88.9 million in July with fewer and less popular events available during the summer. Sportsbooks in August generated $6.6 million in net receipts from the 21 percent increase in betting activity, compared with July, after paying out $101.8 million in prizes, the commission reported.
Most of the sports wagering took place via online apps — where gamblers placed $96.1 million bets in August and $174.5 million so far this fiscal year, which began July 1. Legalized sports wagering in Iowa generated $965,712 in tax revenue for the state treasury in the current fiscal year.
Last month marked two full years of legalized sports gambling in Iowa, dating to the Aug. 15, 2019, kickoff and the Jan. 1, 2021, expansion to allow online registrations for Iowans aged 21 and older. Licensed sportsbooks using online apps or in-person options at state-licensed casinos have generated more than $1.8 billion in wagering that produced nearly $130 million in gross gaming revenue and more than $9 million in state tax revenue during the 24 months of operation.
Sports bettors placed $3.5 million per day over the 31 days of August, up from $2.9 million per day over the 31 days of July, according to a PlayIA.com analysis. Despite the volume increase, operator revenue fell 14.3 percent from July, resulting in $486,608 in tax revenue for the state. Year-over-year, August’s wagering was up 115 percent compared with $50.3 million in August 2020.
“As slow as the summer months have been, the growth over the last year in Iowa remains remarkable,” said Russ Mitchell, lead analyst for PlayIA.com. “Nearly $1 billion in eight months represents a significant jump forward, and that growth should only accelerate over the next four months.”
Iowa’s 19 state-licensed casinos saw a slight downturn in adjusted gross revenue for all gambling in August — a $145 million total that brought the year-to-date total for fiscal 2021 to $302.5 million. Monthly admissions were down slightly with 1,494,619 patrons through the turnstiles but still recovering from a shutdown period in 2020 caused by the pandemic.
State taxes on casino gambling profits approached $53.4 million for the fiscal period that began July 1.