Revenue at Colorado’s sportsbooks jumped in June, spiking tax revenue for the state in the process, even as sports betting volume in the state slipped for the second time in three months.
The seemingly contradictory results are not a surprise over the summer months, when sportsbooks win a higher percentage of primarily futures bets made on sports such as tennis.
“Tennis and golf don’t generate the same kind of interest as major team sports, obviously, but the higher win percentages help sportsbooks offset the offseason dip in betting volume,” said Jessica Welman, analyst for the PlayUSA.com network, which includes PlayColorado.com. “With the Olympics here, and major golf and tennis tournaments dotting the July calendar, Colorado’s sportsbooks will get a bit of a boost even if bettors engage less.”
Colorado’s online and retail sportsbooks took in a combined $229.8m in wagers in June, including $227.1m in online wagering, according to data released Tuesday by the Colorado Division of Gaming. June’s handle was down 7.7 per cent from $249m in May as bettors poured in $7.7m per day over the 30 days of June. In May, bettors placed $8m in wagers per day.
Year-over-year, wagers in June were up from $38.1m in June 2020, a month still hampered by the pandemic-related shutdown of most major sports.
The decline in wagering didn’t stop gross gaming revenue from rising 30.2 per cent to $19.7m in June from $15.2m in May. After promotional credits, net sports betting proceeds came in at $11.7m, yielding $1.2m in tax revenue, the second-highest ever for the state.
Colorado’s 23.7% per cent decline in betting volume from $301m in March is in line with much of the US March brought the highest betting volume in US history, with $4.6 billion in legal bets placed across the US With no football or betting holiday like March Madness, combined US handle fell to $3.7bn in both April and May and is on pace for a similar total in June. That is a 19.6 per cent drop from March’s high.
“Overall, Colorado continues to weather the summer months relatively well,” said Ian St. Clair, “June’s revenue boost was not only good news for sportsbooks, but for the state. That is important when the tax receipts from sports betting have been somewhat disappointing overall.
Boosted by the Denver Nuggets’ playoff run, which lasted until June 13, pro basketball remained king in June with $74.9m in bets. That was down from $86.9 million in May but marked the sixth consecutive month that basketball betting has generated the lion’s share of bets at Colorado’s sportsbooks.
Baseball generated $54.6m, up from $49.1m in May. The Colorado Avalanche were eliminated from the NHL playoffs June 10, just enough to keep hockey betting in fifth place in June with $10.7m in wagers. But soccer ($12.7m) and tennis ($12.3m) drew even more interest, while table tennis ($8.7m) remained popular.
“There is no way for tennis or table tennis to completely make up for a sports calendar in June that was suddenly devoid of local interest after the Avalanche and Nuggets seasons ended,” said St. Clair. “But Colorado’s uniquely diverse betting interests have unquestionably helped sportsbooks side-step steeper declines over the summer.”
After June’s results, Colorado sportsbooks are about to reach another, albeit obscure, milestone. With June’s $7.5m in free bets — which sportsbooks offer to attract new customers at no risk to the bettor — Colorado’s sportsbooks have now given away $96.2m in free bets since launch.
“Sportsbooks have invested heavily in the market, and one way they continue to do so is through free plays,” Welman said. “Mostly, it’s been a successful strategy that has really kept bettors interested. Free bets do sap tax revenue, but ideally the strategy will pay off long-term by growing the market.”