The state of Nevada “set a new record for monthly handle” in March, despite sports fans now having the ability to place bets in 7 other states. Remarkably, the $600 million that the state accepted in wagers bested its previous high by +5.4%. Sportsbooks within Nevada combined to win $32.5 million during the month (7.1% hold), also a new record in the Silver State.
Howie Long-Short: There’s a common misconception that because “New Jersey is such a strong market” (March handle: $370 million) – and 6 other states also offer legal sports betting – that Nevada’s business would suffer, but Adam Candee (managing editor, LegalSportsReport.com) says “that presumption only works if you assume that there is a limited pool of bettors. As legal sports betting becomes more readily available, the pool of participants will grow – it’s not limited to trying to bring in those currently betting in the illegal off-shore markets.”
Sportsbooks in Las Vegas are buoyed by the city’s reputation as a party destination. Nevada’s record month had more to do with “people coming in for the experience, than it did visitors arriving to place bets on games.” Unless another city were to begin offering all the entertainment and dining options that draw visitors to Sin City, it’s unlikely that the state’s operators will lose a significant portion of their business as legalized sports betting becomes more prevalent.
Candee suspects that even if sports betting expansion were to cause a decline in visitors, brand loyalty could help to offset any losses that Nevada casinos might experience; “I can tell you anecdotally that there is a lot more advertising of mobile apps in NV casinos than there was in the past. Companies like Caesars and MGM – that operate in multiple states – are really trying to get bettors to use their app when they go home to states like New Jersey or Pennsylvania [where sports betting is legal].” He’s right, the average sports bettor is not going to shop lines. They’re “going to find an app (or two) they like, and place their bets with that book. Even if it means they don’t maximize their EV or have to pay a bit more.”
When New Jersey outearned Nevada – for the first time – in January, some suspected that the state might be losing its stronghold as the country’s gambling mecca; recent comments by NJ gov. Phil Murphy – that it would occur as soon as 2020 – have only fanned the flames. Candee isn’t convinced. He notes that fragmentation is going to have a “major impact on the New Jersey market. We’re just a couple weeks out from the launch of mobile in PA and obviously if New York were to ever get its act together in terms of legalization, that too would hurt NJ licensees; a lot of New Jersey’s business is coming from folks making the trip across state lines.” It must be noted that even without NY and PA capitalizing on PASPA having been struck down, the state’s handle was just +/- 61% of the money wagered in Nevada during the month.
80% of the bets placed in New Jersey last month were done through a mobile application, while just 50%-70% of the wagers made in Nevada originated via that medium. The influx of out-of-towners gambling in Las Vegas sportsbooks (while watching the games) and a state bylaw that requires gamblers to make deposits for their mobile accounts within a brick and mortar casino help to explain the variance.
Fan Marino: The first weekend of the NCAA tournament has long been Nevada’s most lucrative 4 days of the year, but there’s been a “dramatic upward trend” in the state’s basketball handle over the last 5 years; rising from $324 million in ’15 to $437 in ’18 before climbing to $495 million this year. Candee suggested that a bounce-back in the U.S. economy (think: “people spend more in Vegas when they have more to spend“) and the “increased recognition and marketing of Las Vegas as a March Madness destination” are among the reasons for the rising handle.
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