Business By The Books: What Does Unibet Leaving Iowa Say About US Sports Betting?

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The parent company of Unibet is pulling the brand out of Iowa by the end of the year, which could be a bigger indicator for US sports betting in general.

Kindred launched Unibet in Iowa last September, commenting on Iowans’ “unparalleled” passion for football in its news release.

The brand failed to grab a substantial spot in the market, though, with just 0.2% of handle and 0.5% of revenue for the 13 months it has been live. Those figures of $5.3 million in handle and $1.4 million in revenue are a bit inflated as they include a $1 million futures bet on the Houston Astros to win the World Series from Mattress Mack.

Kindred is now focused on states that include online casino as well, CEO Henrik Tjärnström said during the third-quarter call.

Is Iowa foretelling US sports betting future?

A smaller operator leaving a mature state controlled by US sports betting leaders should not be a surprise. In fact, this is likely just the beginning of multiple similar situations over the next few years.

Sportsbooks, especially smaller operators in states without a higher-margin online casino product, cannot continue to dish out handfuls of promo dollars to try to sway customers from other books. The losses sustained by Caesars Sportsbook in New York at launch, only to lose the market share lead to FanDuel once those promos dried up, is a prime example.

Iowa also saw handle dip 4.8% in September from last year, which likely also ties into those promotional dollars. Iowa Racing and Gaming Commission Administrator Brian Ohorilko shared anecdotally with LSR that his office has received fewer calls about promotions and that he has seen fewer sportsbook ads in his daily life than last year.

Colorado, Virginia see tax growth after promo changes

Changes to promotional deductions in Colorado and Virginia did not slow down betting in those states, revenue reports show. Both states saw record revenue and taxes paid in September after they changed how operators can deduct promotional dollars from taxable revenue.

Virginia’s latest budget changed its promo rules to only allow deductions from taxable revenue for the first 12 months. That meant just $1.7 million was deducted in promos for the month compared to $17.4 million last September, which led to $7.3 million in taxes paid.

Colorado lowered the percentage of taxable revenue that can be deducted, but that does not appear to have changed the promotional activity that much year-over-year. Operator deductions were $18.5 million this September compared to $19.8 million last year.

Despite those changes, which theoretically should lead to lower overall promotional activity in the states, both saw handle growth. Virginia’s handle jumped 40% over last September to $411.3 million while Colorado’s handle hit $450.2 million, up 10.3%.

Illinois to relaunch online sports betting license bidding

Another story out of Illinois highlights the shifting US sports betting landscape.

The Illinois Gaming Board announced last week it would reopen the bidding process for up to three $20 million online-only sports betting licenses.

The first bidding window ended in April with Tekkorp winning as the only qualified bidder. The company was in talks to acquire Caliente at the time, but the SPAC called off any acquisition citing market conditions.

Fertitta buys into Wynn

Wynn Resorts’ stock saw a big bump on Monday after a filing showed Tilman Fertitta now owns 6.1% of the company.

The stock closed at $63.90 Monday, up 9.6% from Friday’s close, and was still climbing Tuesday morning.

Fertitta is making noise in Las Vegas right now, as he was recently approved to build a new casino on the Strip.

That project could again ramp talk of the first DraftKings Sportsbook in Las Vegas, considering he owns a good chunk of DKNG stock following DraftKings’ all-stock acquisition of Fertitta’s Golden Nugget Online Gaming.

Earnings calls coming up

It is peak earnings season for those interested in the US sports betting industry. Here’s a look at some of the biggest calls coming up in the next week and a half (all times Eastern):