March Madness Set To Lift Nevada Sports Betting Handle To $1B Month – Gaming Today

Nevada could see about $441 million in sports betting handle from March Madness in 2022, according to analysis by Gaming Today. With projected revenues of $25.6 million for sportsbooks during the mens NCAA Tournament, based on an estimated hold percentage of 5.8%, this would net about $1.7 million in tax revenue for the state.

We project total sports betting handle for the state in March 2022 to hit $1.103 billion, with college basketball accounting for about 40% of that figure.

Nevada sports betting is highly seasonal. Fueled by football and college basketball, it has a clear peak season that runs from September to March. On a month-to-month basis, the states sportsbooks have seen explosive growth during the current peak season compared the last years peak season. For example, January 2022 saw $1.1 billion in total, up from $646.7 million in January 2021 and $502.5 million January 2020.

November has seen a similar pattern, with 2021 handle for the month reaching $1.1 billion, up from $609.4 million in 2020 and $614.1 million in 2019. Other months have followed the same year-over-year trajectory, too, so we project a similar bump for March 2022.*

*the 2020 NCAA Tournament was cancelled.

March Madness is one of the largest sources of revenue for sportsbooks. Due to the sheer number of games, the NCAA Tournament generates more betting handle than the Super Bowl. Over four years from 2017 to 2021 (excluding 2020 COVID aberrations), March sports betting handle in Nevada has been 27% higher than the average month.

In fact, March and January typically jockey as the months with the largest sports betting handle in Nevada, followed closely by November, October, and September.

The mens NCAA Tournament features 67 games over a three-week span, and the madness of March really begins in the weeks prior with conference basketball tournaments commanding the attention of bettors. Like the Super Bowl, March Madness drives engagement among even casual sports fans, who are busy filling out brackets for pools with friends and co-workers.

When the U.S. Supreme Court struck down PASPA in 2018, some analysts forecasted a decline in Nevadas sports betting industry. But Nevadas handle and revenue numbers continue to increase.

In fact, legalization may be having the opposite effect on Nevada than anticipated. Sports betting legalization in new markets has encouraged technological advancement among Las Vegas sportsbooks (i.e. better apps and enhanced wagering menus). Sports betting legalization has also led to increased awareness and education about sports betting among sports fans. So, more tourists are comfortable at Nevadas sportsbooks than ever before.

With that massive push [of new legal sports betting] comes a general awareness that sports betting is legal, Brett Abarbanel, director of research at UNLVs International Gaming Institute, told NBC News after this years Super Bowl. Now, having that awareness, you realize perhaps these legal opportunities exist.

Nevada has a long history of sports betting, so it has a mature market to project with. We took the average handle from September 2020 to August 2021 to get an accurate fiscal year of data. This followed the drop in revenue caused by COVID closings, so the year of data was not distorted by major sport cancellations or sportsbook closures.

During 2020s post-COVID recovery fiscal year, peak season monthly handle grew by an average of 72% over the previous year. For example, December 2021 handle was 71.8% higher than December 2020.

Monthly sports betting handle during the current peak season grew by an average of 72% from the previous year. Since other peak months already experienced similar explosive growth, we applied that growth rate to March 2021 handle. This put projected March 2022 handle in the same range as the current peak season.

Since BetMGM is the online sportsbook of more than a dozen Las Vegas hotel and casino properties, it serves as a decent gauge for Nevadas overall market.

NCAA basketball comprises about 40-50% of BetMGMs total March handle, according to estimates the company emailed to Gaming Today. We used the low end of that range to project March Madness handle for Nevada sportsbooks overall. So, we took 40% of our estimated $1.103 billion and arrived at about $441 million.

Finally, we took Nevada sportsbooks average hold of about 5.8% over the past five years to estimate taxable income (we excluded March 2020 to June 2020 due to COVID aberrations.) Then we applied Nevadas 6.75% tax rate to projected sportsbook revenue to estimate state tax revenue from March Madness alone.

Overall, our projections leaned conservatively. The average 72% monthly increase in sports betting handle has been relatively consistent from September to January. So, thats the increase we used to get from March 2021 handle to March 2022 handle, as March figures to be in line with the current seasons pace.

For our analysis, we reached out to industry sources and used publically available data from Nevada. Where Nevada-specific data was unavailable, we pulled data from other markets and news stories.

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March Madness Set To Lift Nevada Sports Betting Handle To $1B Month - Gaming Today