116 3rd St SE
Cedar Rapids, Iowa 52401
DES MOINES — Iowa gamblers ended fiscal 2021 with a record-breaking flurry, setting new all-time marks for betting on casino, sports and lottery games that taken together topped $3.2 billion.
Iowa’s 19 state-licensed casinos reported adjusted gross revenue of nearly $1.58 billion via their slot machines and table games and a separate sports wagering handle of over $1.2 billion that netted them nearly $90 million in receipts for the 12-month period ending June 30, according to state Racing & Gaming Commission data posted Friday.
“I think it was a lot of pent-up demand,” said Wes Ehrecke of the Iowa Gaming Association, an umbrella group for the licensed casinos in Iowa. “It’s a positive sign that we’re closer to back to normal.”
Favorable weather, availability of COVID-19 vaccinations and more discretionary money earmarked for entertainment as Iowa’s farm and overall economy rebounded were all factors contributing to a turnaround from last year’s 20 percent revenue decline, he said.
“It all just kind of came together,” said Ehrecke, “especially during the second half of the fiscal year.”
Casinos took in about $141.5 million in June to post a yearly record that topped the previous high of nearly $1.47 billion in fiscal 2012 by more than $109.4 million. The fiscal 2021 figures represented a huge rebound for casinos that saw revenue dip to $1.16 billion during a COVID-19 ravaged year in which the pandemic forced them to close for 11 weeks under the state’s public health disaster emergency.
“It was big numbers,” said Brian Ohorilko, administrator of the state Racing and Gaming Commission, who noted that many casino operators are still in the process of rehiring employees, renting venues and providing amenities that were shuttered during the ongoing pandemic.
“It would have been hard to have guessed that the industry would have done this well given where we were at a year ago,” he noted. “It was a tough situation for many of the operators. It really a good spot right now.”
Ohorilko said many state-licensed casinos are doing “much better than they would have anticipated in terms of a recovery at this point in time,” and are cautiously optimistic about the future. Many used the pandemic to “reset” their marketing strategies to target promotions “to the seasoned gamblers instead of maybe casting a wide net” given the yearly trend toward reduced admissions.
Sports wagering, which saw its first full fiscal year since the activity was legalized in Iowa beginning in August 2019, generated nearly $111.2 million in bets last month to surpass the $1.2 billion mark for fiscal 2021. More than $985 million in wagers were placed using online apps after Iowa’s law changed Jan. 1 to allow betting over electronic devices without requiring players to first travel to a casino to set up an account in person.
“The year brought significant challenges to Iowa’s sportsbooks, which made the results all the more impressive,” said Jessica Welman, analyst for the PlayUSA.com Network, which includes PlayIA.com. “The best news is that with the pandemic’s effects on the industry waning, and online registration firmly in place, the last year is only a glimpse of Iowa’s true potential.”
The increased betting action proved profitable for the state as well, with casinos paying $314.5 million in state taxes on gambling at their facilities and $6.07 million in state taxes on sports wagering proceeds.
State proceeds from lottery profits stood at $95 million on a record $417 million in sales through May, with the Iowa Lottery Authority expected to issue its 12-month financial data later this month — a revised total that will push overall gambling in Iowa for fiscal 2021 well above $3.2 billion.
The impact of that $3-billion-plus appetite for gambling will carry an increasing social cost that may not be easily or immediately detected, said Tom Coates, executive director of Consumer Credit of Des Moines, a credit counseling service, and a leading gambling critic in Iowa.
Coates’ concern was backed up by Eric Preuss, manager of the Iowa Problem Gambling Services program with the state Department of Public Health, who reported more contacts from people seeking gambling problem referrals with casino table games and slot machines primarily cited followed by lottery and sports wagering.
“The numbers are trending up,” said Preuss, although he pointed to concerns associated with the COVID-19 pandemic as reasons for a 12 percent decline in Iowans who visited yourlifeiowa.org/gambling and a drop in the number of people seeking help who actually show up for referrals to service providers.
“Our job is that we want to make sure that people are staying within their limits,” Preuss noted, given that anywhere from 1 to 3 percent of betters become problem or pathological gamblers. “We stand at the ready should individuals need help,” he added. “That’s what we’re here for.”
Preuss pointed to low-risk gambling guidelines put out by the Canadian Centre on Substance Use and Addiction that recommends gamblers bet no more than 1 percent of their household income before taxes each month; gamble no more than four days per month; and avoid gambling at more than two types of games on a regular basis.
The casino figures point to wagering by more serious rather than casual gamblers, with this year’s attendance of almost 16.4 million through the turnstiles down from 22.8 million during the previous fiscal 2012 record year. Also, the casinos’ latest per-capital “win” averaged $96 compared with $75 the previous year and $73 in fiscal 2019.
Coates said casino operators and lottery officials realize they need to move toward sports and online games that attract younger clients — and can be highly addictive — because the brick-and-mortar casinos and printed tickets are geared more for slow-machine and traditional players.
“They’ve got to get all of this stuff up online because that’s where the younger audience is. They know that that’s the direction it’s got to go,’ Coates noted. “They can’t continue with the older generation that are dying out. They know that the younger people are not going to sit on those slot stools all night long and play, so they’ve got to find a way to get it up online.”
June saw the pace of sports wagering in Iowa drop for the third consecutive month even as revenue jumped, according to analysts from PlayIA. Even so, the overall $1.2 billion handle will become the yearly benchmark, said Ehrecke, adding “I hope we can get to that same level next year and beyond.”
Welman said Iowa is “far from reaching its ceiling” as a sports-betting market with a lot of “untapped potential” with the overwhelming focus on online services and the aggressive marketing that is taking place.
“With a lighter sports schedule and few local betting events to spur interest, Iowa won’t see significant growth in betting again until the football season,” said Dustin Gouker, analyst for the PlayUSA.com Network. “But there is no question that the Hawkeye State is in good position, poised for a fall expansion when Iowa, Iowa State, and the NFL once again draw bettors to sportsbooks.”
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