Legal sports betting in the state of Nevada is a big as ever with four-straight monthly handles above the $1 billion plateau. Exploding to $1.109 billion in January, total sports betting volume was up 71.6% against the same month in 2021.
This record handle also reflected a solid 9.3% increase from the total sports betting handle in December of last year. The Nevada Gaming Control Board recently released January’s numbers as the highlight to this record-setting month.
With January’s results, the total monthly sports betting handle in Nevada has now exceeded $1 billion in the final three months of 2021 and in the first month this year. Coming off the Super Bowl, the prospect for a strong February performance remains rather high.
Heading into March Madness and the annual NCAA Tournament for men’s college basketball, this winning streak could reach six months.
Nevada Betting Handle vs. Betting Hold
While the betting handle refers to total volume, a sportsbook’s hold is the money made off of all those bets.
There is no doubt that Nevada remains one of the hottest betting markets in the legal US sports betting industry given its performance over the past four months. However, the in-state sportsbooks’ hold has been nothing to write home about.
The total hold on January’s record handle was only 4.5%. So the total revenue the Nevada books took in January on a record $1.109 billion only added up to a little more than $49 million.
The industry was going against a strong 8.62% hold in January of 2021. However, the net result this year is still a cause for concern.
A low monthly hold percentage is one thing. January marked the sixth straight month that Nevada sportsbooks’ total hold was lower as compared to the same time frame the previous year.
Going back over the last six months, Nevada sportsbooks have not posted a monthly hold higher than 6.89% (Sept. 2021). Even more shocking is the fact that the monthly hold has been lower than 5% in three of the last six months.
The downward trend started in August of 2021 with a hold of 3.36%. That number dipped to a low of just 1.44% this past December.
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Current Trends and Future Results
Nevada sportsbooks have been suffering through an extended dry spell as far as monthly hold in what has to be considered a significant downward trend.
The betting public does get the best of the books from time to time. However, these suppressed hold rates over an extended period of time is a rather alarming trend. The added promotional costs tied to new player acquisition is one of the major drains on monthly revenue.
The high cost of doing business is an issue that has been plaguing the entire legal US sports betting industry. In recent earning call to investors, Caesars Entertainment noted that the company has plans top cut promotional spending for Caesars Sportsbook.
With lower than expected hold percentages against climbing monthly handles, cutting costs against revenue may be the only way to impact future results.
