Iowa ready for big things in 2021

Iowa may have launched sports wagering earlier than any of its Midwest counterparts, but to most operators, the state has been taking its revenue potential at a jog, and not a sprint.

The Hawkeye State took its first legal bets back in August 2019, but it did so with a specific requirement that all players must first set foot in a licensed brick-and-mortar casino sportsbook to register and participate, either in person or through an online app.

The idea was to give Iowa’s 18 licensed casinos for sports betting an experiential shot in the arm and a new pool of customers. To outside providers, the requirement placed geographical limitations on their reach.

But all that changes come Jan. 1, when the same law that enacted sports wagering in Iowa allows that in-person registration requirement to expire. A rural resident can now download the app from his or her home and bet right away, and players itching to give other apps and services a try no longer have to trek across the state and into another casino to do so.

As such, although the market has been up and running for 16 months, the new year brings a sort of second launch to Iowa’s 3.16 million in population. Or, in the opinion of some operators, something even greater.

“I’d actually call it a first launch, because this is the correct way to do it. This gets everybody who wants to be involved to be involved,” said Johnny Avello, DraftKings’ director of sportsbook operations. The daily fantasy giant has sportsbook affiliations with three Wild Rose Casino properties in smaller towns in Iowa. “It’s been a tough year, and if you have to go to a place to register, some people just don’t want to leave their home, or the facilities have been closed.

“Even if this weren’t a pandemic year, it’s now easier for people to participate in what we offer. It’ll be a game-changer.”

Brian Ohorilko oversees state gaming rules and regulations as the administrator of the Iowa Racing and Gaming Commission, so it’s not his place to champion one provider over another. But in approving the technology for sports wagering, he’s seen the nuts and bolts of what licensed companies have to offer.

Eight such providers had attached themselves to physical casino properties over the course of this initial betting period in Iowa, but the casinos themselves can have up to three individually branded agreements, or skins, with sportsbooks. Consequently, Ohorilko said another dozen sportsbook brands are looking to enter the fray with the in-person requirement lifted. Such competition can only benefit the consumer, he said.

“I think it will be interesting to see how the market in Iowa shifts, once customers have access to various sports wagering companies. I would expect some growth, but significant market shift,” Ohorilko said. “We’ll see increased advertising, marketing, promotions and requests for creative wagering opportunities to get both new and existing customers, so it should be a very good time to be a customer in the state of Iowa the first few months of 2021.”

Those paying attention to how handle was increasing and shifting across the state in 2020 can already see those competitive tremors. Despite the coronavirus pandemic, Iowa set a record for single-month handle in November with $87.2 million wagered, far above totals of nearly $60 million in the thrust of the football playoffs and basketball season this past winter.

And the market share has shifted considerably since then. Upon launch and in the first six months thereafter, William Hill dwarfed competition in handle and revenue based on its affiliation with Prairie Meadows Racetrack and Casino in Altoona, a suburb of Des Moines, the state’s largest population center. In February, for example, that casino alone drew $20.3 million in Internet wagers alone and $21.6 million in handle overall of the state’s $56.9 million total pool.

By November, even though the handle had increased by more than 50%, Prairie Meadows’ total wagers dropped to $17.8 million online and $19.2 million overall. The big gainers were the Wild Rose property in Jefferson (a little more than an hour northwest of Des Moines), which soared from $630,000 in total wagers in February to almost $10.7 million in online and retail by November; and the two FanDuel-attached Diamond Jo properties in Dubuque, on the Iowa-Illinois-Wisconsin triangular border, along with the Worth County property near the Iowa-Minnesota dividing line. The two sites accounted for more than $15 million in handle and just over $9 million in Internet handle despite not having any online presence in February.

Among the Iowa properties and companies that could benefit most from the relaxing of in-state geographical restrictions is PointsBet, which has its current affiliation with Catfish Bend Casino in Burlington, a 25,000-person town tucked in Iowa’s southeast corner more than 90 minutes from a significant population center and with significant early business from Illinois, which has since legalized sports wagering itself.

And yet, the casino drew close to $1.8 million in total handle in November and just over $1.4 million in web-based wagers. Caftish Bend general manager Rob Higgins sees fierce loyalty from his customers because of what he believes to be PointsBet’s superior technology and betting menu.

“We were working off a browser and the company activated the physical app in November, and I’m hearing from nearly all our customers is that the speed and ease of using the app is much better than anything they’ve seen,” Higgins said. “We can say that it’s two or even 2.5 times faster than average, and PointsBet operating its own technology is unusual. Plus, they have about 75 to 80% more in-game wagering than anything out there on the market.”

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Higgins is alluding to the company’s PointsBetting concept, which allows bettors to maximize their potential winnings (or deficits) if they identify an outcome that departs significantly from the set spread line. The other primary benefit, according to PointsBet vice president for customers and insights Ron Shell, is to enhance the experience of watching a game with minimal stakes.

“Perhaps you get a bet on the first 3-pointer made in an NBA game in seconds, or a combination of a player’s points, rebounds and assists, or a multiplier of a quarterback’s yards plus touchdowns. Those arrangements make you watch until the end of the game, whether you’re winning or losing,” Shell said. “Usually, when you’re winning or losing comfortably, you won’t see a need to watch until the end of an event if it’s not otherwise important to you. But when you have chances to either reduce your loss or increase your winnings, you remain hooked. We tell customers to ease into that part of our product, and we believe that it’s engaging and unique to us.”

That’s an example of how word of mouth and selective advertising can pay significant dividends, Shell said.

“If you can get a potential 5-10% market share that would be equal to a 2% share somewhere else in terms of revenue, that’s how you look at an opportunity in Iowa. You start from a smaller base, sure, but there’s a greater opportunity to grab a lot of the market. … That doesn’t mean we don’t have great focus on places like Illinois and Michigan, but does mean that Iowa as a separate entity can be just as important for us, especially as some of our competitors may not have the state as a major focus and as we also concentrate on opportunities outside of pro sports.”

To that end, Shell brought up early promotional opportunities based around the Iowa Hawkeyes men’s basketball team. Any customer who bets $25 or more on the spread of Saturday’s Iowa-Rutgers basketball game will receive a betting dollar credit for each point Iowa scores. And when Iowa plays Maryland the following week, another credit will be applied based on the point output of Luka Garza, the Hawkeyes’ star and national player of the year candidate.

Avello, of DraftKings, said the company plans to roll out similar “no-brainer” boosts on the Sugar Bowl and this weekend’s Chicago Bears-Green Bay Packers NFL game.

Jason Scott, the vice president of trading for BetMGM, which will launch online in Iowa on Jan. 1, says the Iowa landscape is reflective of how the sports wagering industry in evolving out of a previous perception into its current reality.

“I see betting as not just about moneymaking, but a user experience that has to be fun, enjoyable and easy to navigate,” he said. “… It’s more mainstream. It’s not some dirty enterprise run by less-than-desirables talking to players about point-shaving or referees about calls. It’s part of adding additional enjoyment to watching sports.

“It’s men and women wagering $5 or $10 from ages 21-80, not just your guy in his 40s with huge wads of cash.”

Over time, which apps or services will win out in Iowa and other states? Shell believes his company has a good formula.

“Candidly, the best product is going to win. Promotions are important to building equity and loyalty, but they can be a race to the bottom. It comes down to the product, and to invest in customer feedback and personalization.”

Translated: Let the games in Iowa begin — again.

About the Author
Danny Lawhon

Danny Lawhon

Danny Lawhon is based in West Des Moines, Iowa, and has maintained a diverse sports journalism career for more than a decade, including with the Des Moines Register. A native of northwest Missouri, Danny earns his betting money as a professional musician.

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