Removal of the need for in-person registration has seen Iowa’s sportsbooks flourish in January, easily surpassing the state record with nearly $150m in bets. And with many of the biggest sports betting brands, including DraftKings and FanDuel, now gaining a foothold in the Hawkeye State, Iowa is poised for far more growth, according to analysts for PlayIA.
Online and retail sportsbooks combined to take in $149.5m wagers, up 42.7% from the record $104.8m handle in December. Those bets increased net receipts to $11.3m, up 50.5% from $7.5m in December, which yielded $765,673 in state taxes.
“January was the just first test of an unshackled market, but it didn’t take long to realize just how much Iowa’s sportsbooks have been held back by the state’s in-person registration requirements,” said Dustin Gouker, lead analyst for PlayIA.com.
“These will be an exciting next few months in the market, with some of the biggest sports-betting holidays — namely the Super Bowl and March Madness — buoying what should be rapid expansion. This is a whole new era in Iowa sports betting.”
Iowa is the first major US market to report January data, but only seven states drew more in bets in December. Tennessee was seventh with $180.9m in December wagering.
Online betting was the clear winner for Iowa, with 80.8% of all bets, or $120.8m generated online. In December, online betting accounted for 74.5%, or $78.1m, of all bets. In the US, about 82% of all legal sports bets are made online, with most of the states without in-person registration requirements, such as New Jersey and Pennsylvania, taking in closer to 90%.
“Iowa’s market already showed a strong preference for online sportsbooks, but the change in the requirements should bring the state more in line to what we see in states such as New Jersey and Pennsylvania,” said Jessica Welman, analyst for PlayIA.com. “In the pre-pandemic environment, online growth actually grew the pie rather than siphoning off significant action from the retail market. Once the market normalizes, that pattern should hold in Iowa, too.”
The end of the state’s in-person registration requirement altered the landscape for operators, too. DraftKings, the dominant brand on the Wild Rose license, helped wrestle the market lead away from William Hill/Prairie Meadows, but only slightly.
The Wild Rose license, which includes DraftKings and newly launched BetRivers, accounted for 33% of the state’s online handle in January with $40.1m in bets. William Hill, though, still attracted $39.8m and led the market with $2.9m revenue, making it the state’s single-largest brand.
FanDuel, the nation’s largest sportsbook brand, fueled Diamond Jo’s $26.9m in online bets. The Diamond Jo license, which also includes newly launched BetMGM, was second in revenue ($2.2m), topping No. 3 Wild Rose ($2m). Diamond Jo Worth topped the retail market with $7.2m in wagers.
“FanDuel and DraftKings own the market lead in nearly every legal US market, so it’s no surprise that they capitalized on the rules change to increase their market share,” Gouker said. “But William Hill is proving to be a tough competitor. The battles over market share are now just beginning to heat up, though. That is good for consumers, who will benefit from fierce competition among operators.”