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US – Sports betting sees first month-over-month decline in Illinois

By - 11 April 2021

Illinois sportsbooks posted a month-over-month decline in betting volume for the first time since launching in late July, continuing what was a national trend in February. But the state still managed to narrowly surpass Pennsylvania to place third among US states for the month.

More concerning for what has been a booming industry in Illinois, though, is the return of in-person registration, which could stymie online sports betting growth for as long as it is in place.

“Passing Pennsylvania should be momentous but it is almost certainly going to be short-lived, as the decision to return to in-person registration will likely mean the end of growth for the Illinois sports betting industry,” said Jessica Welman, analyst for PlayIllinois.com. “Open registration has been a key component in making Illinois one of the largest sports betting markets in the country. Forcing people to physically appear in a retail sportsbook is a counterproductive measure, which should be apparent whenever Illinois April data is released.”

With open registration still in place in February, Illinois retail and online sportsbooks attracted $509.8m in wagers, according to official data released Friday. That is down 12.3 per cent from the record $581.6m in January, an expected dip with fewer days during the month and only one NFL game to bet. That game, the Super Bowl, drew $45.6m in bets, though some of those bets were accepted prior to February.

Bettors placed $18.2m per day in the 28 days of February, which was down slightly from $18.8m per day in January. Illinois’ relatively modest pullback made it the third-largest US market in terms of money wagered, gaining ground on leaders New Jersey ($743m) and Nevada ($554.1m), while topping Pennsylvania ($509.5m) for the first time.

February’s handle also produced $30.3m in operator revenue, down 38.7 per cent from the record $49.4m in January. But the month’s win produced $35.4m in taxable revenue, which yielded $5.3m in taxes for the state and another $541,832 in local taxes.

“February’s results in Illinois actually compare well to the other major markets in the US, showing that the state had yet to reach its ceiling,” said Joe Boozell, analyst for PlayIllinois.com. “Even with the return of in-person registration, operators have set a good foundation of bettors that will sustain the industry, even as the rules stunt the market’s growth.”

For the first time in months, retail sportsbooks were open for a full month, attracting $19.6m in bets. But online betting still drove 96.2 per cent, or $490.2m, of the state’s handle. That is down from 98.9%, or $575.2 million, in online betting in January.

DraftKings/Casino Queen remained the market leader by accepting $199.8m in online and retail wagers in February, which was down from the operator’s $244.2mhandle in January but still represented 39.2 per cent of the state’s total handle. $196.5m of February’s bets came online.

FanDuel/Par-A-Dice Hotel Casino was second with its $158.9m handle, $158.4m of which came online. The operator’s overall handle was down from $173.5m in January. BetRivers/Rivers Casino was third with $86.9m in online betting and $96.4m overall, down from $112.7m in January.

The market has also gotten more competitive, most notably from the March 11 launch of Penn National’s Barstool-branded app, which is partnering with Hollywood Casinos. But Barstool’s launch came just weeks before the end of open registration, hamstringing what has been a popular operator in both Pennsylvania and Michigan.

“Barstool had just three weeks to build a customer base in an open environment, which should put it at a permanent disadvantage against the market leaders,” Welman said. “That said, their brand is popular and should draw significant interest, helping to grow the market. It could be the last hurrah, of sorts, as new operators might be deterred by in-person registration.”

In February, Super Bowl betting drove more action than any other single event, of course. But the NBA and college basketball continued to be a popular bet, drawing $256.7m, or 50.4 per cent of the state’s total handle, even as college basketball betting is slowed by the ban on wagers on in-state college teams. And bettors placed $45.3m on tennis, a surprising surge for what is a fringe betting sport in much of the US.

“Illinois has grown in ways that are typical of most major markets, with an overwhelming preference for major US sports and driven less by single events,” Boozell said. “But tennis’ popularity shows that the state is unique in some ways, too. We will now see how operators adapt to the state’s regulatory decisions, which have created challenges that sportsbooks will have to overcome to grow in the future.”

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