With the upscale accommodations at retail sportsbooks inside casinos, guests can think running such an operation is a guaranteed ticket to big money for those casinos. A recent Arkansas sportsbook investigation affirms that isn’t necessarily the case.
The state’s gaming regulators took a closer look at a big difference in actual revenue from one month to the next at one of the state’s brick-and-mortar sportsbooks. Everything is on the up and up but it’s still a good look at how volatile the business can be.
Arkansas sportsbook investigation looks at the books
In January of this year, Oaklawn Racing Casino reported just over $545,000 in sports betting “win.” For those unfamiliar with that term, win is the money that sportsbooks keep from wagers that bettors lose.
Last month, the win at the same casino in Hot Springs dropped to barely over $1,500. Why a drop of $544,000, or about 99.8%, in a month’s time? That’s what the AR Racing Commission wanted a closer look at.
According to the Commission, it found no reason to believe anything illegal or unethical happened. It was simply a better month for bettors at the track. A look at statewide and nationwide results for the same time period shows similar results.
January was a great month for Arkansas sportsbooks
They weren’t necessarily successful in doing so, however. The four books held nearly $1.2 million off that, for a hold percentage of 14%. That was just the second time since February of 2021 that those four casinos combined to win over a million dollars in a month.
A look at the numbers in AR for February reveals a very different narrative.
Bettors only wagered just under $5.8 million last month. Altogether, the actual revenue on that came to a mere $331,000. That is a hold percentage of just 5.6%. Arkansas wasn’t alone in seeing such a downturn, either.
A look at other states’ revenue drop-offs
In New Jersey, the most mature market for legal sports betting in the US outside Nevada, sportsbooks’ combined revenue for February 2022 was barely over half of what it was the previous month. In Pennsylvania, win went from $53.4 million in January to $22.1 million in February.
Perhaps the strongest example of this volatility is the numbers for February 2022 at Detroit’s three commercial casinos. For the month, the three brick-and-mortar sportsbooks actually lost over $850,000 on $25.4 million in bets. In January, for reference, the three made nearly $2 million.
How can numbers fluctuate that much within a month’s time? The sports calendar has a lot to do with this volatility.
All about the football calendar
January features a lot of the most popular events for wagering in the US. In addition to the College Football Playoff and the end of the college football bowl season, there are the NFL playoffs.
February, by contrast, doesn’t feature as many of those high-profile events. While the Super Bowl is undoubtedly the biggest single-day event of the year for betting on sports in the US, it’s just that: a single day.
Additionally, many sportsbooks use that as an opportunity to offer special promotions to acquire new customers. Thus, all the “money” bet on the Super Bowl each year isn’t all actual money.
This is a great reminder for bettors everywhere that when you see reports of sportsbooks taking millions of dollars in bets, that doesn’t mean they’re raking it in. It’s very possible that they could actually not turn a profit at all.