Well, if you have been keeping score (pun fully intended), you will know that despite the battle coming from New Jersey to make sports betting legal in the United States, the first state to actually take a legal wager outside the state of Nevada was actually Delaware. Now, the tiny state has far less difficulty getting bills passed, and they seem to like the limelight for these short windows (this is also a state that offers internet casinos and poker), but we never expect much to happen after the press photos.
Well, the folks in Delaware decided to give us another treat, as this week they announced the returns and handle from the first 20 days of legal sports betting in the state. Why 20 days? Well, they went live on June 5th, and their fiscal month-end is the 24th, so we end up with a shorter month-end report. Here is what the state reported:
- Total handle: $7,000,000
- Total number of bets: 69,698
- Total Revenue (hold): 1,000,247 (14%)
As for the breakdown of the revenues, here is where it went:
- Software partner revenue share: $125,000
After removing this amount, the remaining revenue is split in the following way:
- 50% to the state
- 40% to the operators
- 10% to the pari-mutuel jackpots
So, what have we learned?
Well, we know people are going to jump to all sorts of conclusions, but we want to stress that this is an extremely small sample size – only 20 days of revenue in the first month of legal sports betting in a very small state during a time frame when the most bet on sports are not running.
However, we can definitely draw some thoughts from the information we have received from the state:
People want to bet on sports
Almost 70,000 individual wagers placed in a 20 day period in Delaware is a decent amount. Yes, there would have been some hype around the fact that it is new, but to be fair, that hype may have died down after the first few days. When you consider that players had to go to one of the three land-based facilities to make bets, that shows that the desire is there.
People are not very good at betting on sports
The general public is typically betting with their hearts and not their heads, and that seems to have been the case in the early returns from the Delaware sportsbooks. A hold percentage of 14% is ridiculously high (a typical sportsbook historically holds 5% or so), so either there are a ton of terrible bettors or just a very bad run of games for players. Now, we would love to see these types of holds on an ongoing basis, but when sports like football and basketball are in full swing, we expect the number to be lower. Still, we are very pleased to see these returns…although other states shouldn’t be drawing projections from them for the time being.
States that already offered parlay betting are going to have an advantage
Delaware is one of the states that offers a lottery-based parlay betting game, which has been very successful. This has put sports betting into the minds of residents in advance of legal single-game betting, which means the pool being drawn from is not a fresh-faced as other states. That has definitely had an impact on the early uptake of sports betting.
We know there will be an overreaction
It’s great of the state to announce these numbers, and no doubt they are very proud, but those of us in the industry are concerned about the overreaction by other states. Each state will be different, and when the numbers come in after 3 months or 6 months from Delaware, we expect there will be a different picture painted. However, this shouldn’t take away from the achievements made in this tiny state.
We can’t wait to see what’s next
This is the first set of numbers that can be considered legitimate outside of Nevada for sports betting in the U.S. Historically, while we know that Nevada took 4.7 billion USD in bets last year, we have been throwing darts at the potential size of the market. Extrapolated out, the Delaware average works out to 127,750,000 in the annual handle. Of course, this is based on far too small of a sample size, but at least it is a start. We are thrilled that for the first time, real numbers can be used to track the growth of the legal sports betting market, and we will be watching what the black market operators do in response to the opening of the doors in America.
