Iowa casinos, sportsbooks post record revenue

Iowa gamblers placed a record amount of bets online and in person on both casino and sports games in the last fiscal year, with wagers topping $4 billion — an average of nearly $11 million a day.

Iowa’s 19 state-licensed casinos reported adjusted gross revenue of nearly $1.78 billion from slot machines and table games and a separate sports wagering handle of more than $2.4 billion that netted them nearly $140 million in receipts for the 12-month period ending June 30, Iowa Racing and Gaming Commission data shows.

“That was the highest year on record in terms of adjusted gross revenue,” said Brian Ohorilko, the commission’s administrator.

Casinos posted strong numbers during the first part of the fiscal year, from July through December and into January, as the Iowa and U.S. economies rebounded and the state relaxed and eventually ended COVID-19 public health mitigation measures.

Iowa casinos saw increased attendance, which had not been the case for the last several years. Casinos saw more than 17.4 million admissions in fiscal 22, up 6.5 percent from the previous fiscal year, but still down from 22.8 million through the turnstiles during the record year of fiscal 2012.

Wes Ehrecke, president and chief executive officer of the Iowa Gaming Association — an umbrella group for the licensed casinos in Iowa — attributed the increase in revenues and admissions to pent-up demand during the pandemic and the public viewing Iowa’s casinos as “premier entertainment destinations" where they felt comfortable and safe during the ongoing pandemic.

The increased betting action proved profitable for the state, with casinos paying over $349 million in state taxes on gambling at their facilities and $9.6 million in state taxes on sports betting proceeds.

In addition to casinos, state proceeds from lottery profits stood at $89.7 million on nearly $400 million in sales through May. The Iowa Lottery Authority expected to issue its 12-month financial data next week — a revised total that will push overall gambling in Iowa for fiscal 2022 well above $4.2 billion.

Casino betting, however, has cooled in the last three months as the cost of fuel and goods and services have soared, with inflation hitting a 40-year high and putting a strain on household budgets.

Admissions to Iowa casinos and adjusted gross receipts fell the last three months compared with the same period last year.

Casino admissions in the fourth quarter of fiscal 2022 — April through June this year — were 13 percent below the average admissions for all fourth quarters since 2010.

“It is not possible to determine whether admissions in the future will rebound or whether a new normal can be expected,” according to the latest report from the state’s Fiscal Services Division.

Ehrecke said the revenues will be “tough to replicate,” but show “a robust gaming industry in Iowa … that people enjoy coming to.”

He and Ohorilko, though, note Iowa casinos face headwinds in the coming fiscal year from a slowing economy and out-of-state competition. Nebraska officials last year approved rules for casinos to operate in the state, and ground was broken last week on a temporary casino at the Lincoln Race Course with hopes to open in September, the Lincoln Journal Star reported.

Companies have also announced plans for casinos in Omaha and South Sioux City in Nebraska and Hastings, Minn.

Earlier this year, the Iowa Legislature barred regulators from issuing any more casino licenses in the state for two years, blocking for now another attempt to win approval of a casino in Cedar Rapids.

Sports betting

But while casino betting has cooled for now, sports betting remains hot in Iowa. More than $2.4 billion was wagered in the state for the fiscal year ending in June, nearly double that of the prior fiscal year.

More than 90 percent — or $2.2 billion — of sports bets were placed using online apps for the 2022 fiscal year, compared with $985 million in online wagers for the fiscal year ending June 30, 2021.

An Iowa law initially required players to first register in person at a casino to wager on sports. But players have been able to sign up for sportsbooks over electronic devices starting in January 2021 and then place bets from anywhere in Iowa.

“That threw the door open for sports betting in Iowa and numbers have rocketed to records since then,” said Russ Mitchell, an analyst for PlayIA.com. “You could literally sign up for 17 different sportsbooks right now and compare odds from one sportsbook to another … and maximize your success that way. That really ramped up the advertising. That’s why you saw a lot of DraftKings and FanDuel ads” offering free play dollars and promotional credits.

June sportsbook numbers include totals from 18 companies, but theScore Bet sportsbook began shutting down midway through the month.

And inflation doesn’t appear to be putting much of a dent in Iowa’s sports betting habits.

Even with the seasonal summer slowdown and the absence of football and basketball on which to bet, Iowa keeps setting new sports betting bench marks, Mitchell said.

Iowa casinos and their sportsbook partners collected $122.4 million in sports bets for the month of June, a 10 percent increase from June a year ago.

And casinos and sportsbooks should see an uptick in August, followed by an even larger increase in September with the return of NFL and college football, Mitchell said.

Societal cost

Tom Coates, executive director of a Des Moines credit counseling service and a leading gambling critic in Iowa, worries about the societal cost of the state’s $4-billion-plus appetite for gambling.

The Iowa Problem Gambling Services program with the state Department of Public Health reported more contacts last year from people seeking gambling problem referrals with casino table games and slot machines primarily cited, followed by lottery and sports wagering.

Updated numbers on contacts to Your Life Iowa for gambling related issues were not immediately available Wednesday.

Coates worries the state will see a growing percentage of Iowans — particularly younger Iowans — develop gambling addictions due to the ease, prevalence and popularity of sports betting where individuals can gamble from home using a credit card.

He said casino operators realize they need to move toward sports and online games that attract younger clients — and which can be highly addictive — "because that’s where their bread and butter is.“

Ohorilko, from the Racing and Gaming Commission, encouraged gamblers to take advantage of tools to limit their online betting. Iowa requires casinos and sports betting companies to create tools that allow individuals to place their own restrictions on how much they gamble. Such limits are voluntary for gamblers.

“Responsible gambling is very important for the commission, and I believe for the operators as well,” Ohorilko said.

Comments: (319) 398-8499; tom.barton@thegazette.com