Sportsbooks Are Seeing Improved Revenue in November

Sportsbooks may have been a little on edge at the beginning of November, but they can definitely relax a little now. One Wall Street analyst shows that there have been “significant increases” in revenue at US sportsbooks this month, thanks to strong results in NFL betting where heavy favorites lost.

Upsets Not Upsetting Sportsbooks

Barry Jonas of Truist Securities published his analysis Monday morning. It follows reports from across the US that October gross gaming revenue (GGR) for betting on sports fell slightly from September. This decline was despite a higher betting handle for college and pro football, as well as the MLB playoffs and the beginning of the NHL/NBA seasons.

Jonas explained, “November is indicating sizable (gross-gaming-revenue) increases month over month thus far, given early weekly data, as we believe NFL results have proven more favorable for sportsbooks. In addition, iGaming results continue to impress as a record-setting September was topped by a new high in October.”

Jonas stated that the NFL results suggest a strong November in sportsbooks. These books profit when favorites lose. The end of October also brought the books decent returns after several NFL underdogs won during the month.

NFL Games Turn Unpredictable

Jonas pointed out that seven money-line upsets,  23% of 30 games, is a good indication that sportsbooks will reap the rewards of a lot of losing parlays and higher hold. He emphasized that the results include Thursday Night Football on November 18, but do not include the rest of the past NFL Sunday and Monday. He added, “Given the majority of sports wagering is on football and we note weekly November results are not very detailed in terms of hold by sport, overall hold is significantly higher to date versus October.”

The weekly November data shows more than 100% growth in gaming revenue. Jonas stated that early New York numbers show GGR increasing by 158% despite a 12% decrease in handle since October. Montana saw a 135% increase in revenue and a 43% increase in handle over the previous two weeks.

October sports betting GGR reported so far are down, despite a greater handle. Revenue declined by about 5% while handle was 33% more with approximately 60% of reported GGR. “Each state reported has shown a +29% month-over-month or greater increase in handle, but gross gaming revenue results were mixed,” he explained.

September’s sports gaming revenue rose 87% to $407 million, with handle increasing 69%. According to data from Nevada, New Jersey, Illinois, Mississippi, South Dakota, Oregon. In Wyoming, Indiana, Indiana, Montana and Colorado, $1.5 billion was wagered in football. The GGR was $62 million, which excludes the figures for Indiana and Montana.

DraftKings had 28% and FanDuel 25% of the markets in states where gaming revenue and handle data were disclosed by operators in October. DraftKings held a 36% market share in September, while FanDuel had 27%. Barstool Sportsbook at Penn National has gained share and moved into third place with a 12% handle share. Jonas stated that BetMGM and Caesars Entertainment are at 8% and 7.7% respectively.

iGaming Continues to Gain

In September, the US set a new iGaming revenue record with $329 million. This is an increase from March’s $312 million. However, that figure was eclipsed by October’s $348 million, Jonas highlighted. He added, “iGaming continues its strength and ability to create new revenue streams into markets.”

In line with previous studies and analysis, the results show that the iGaming segment isn’t cannibalizing the land-based segment, which busts the myth held by some operators, such as Station Casinos, who are trying to stop iGaming from becoming more popular.