Super Bowl LIII Hurts Nevada Betting Bottom Line

Even after Nevada bookmakers saw the massive groundswell of public disdain for Super Bowl LIII and the flatlining TV ratings for what was a poorly played and downright boring game they held out hope for a big year. Betting had been brisk in advance of the game, foot traffic had been good and Las Vegas was crowded. Some bookmakers indicated that they anticipated being ‘up’ from last year and that there was a chance for a record Super Bowl betting handle. That turned out to be an overly optimistic assessment. Add Nevada’s Super Bowl betting handle to the list of collateral damage from Super Bowl LIII as revenue was way down from last year’s record haul. The ‘silver lining’ in this otherwise dark cloud was an improved ‘hold percentage’ meaning that books made more money on lower volume.

The Nevada Gaming Control Board reports that $145.9 million (US) was bet on Super Bowl LIII at the Silver State’s 200 sportsbooks. Of that amount, the ‘house’ profited $10,780,319 for a hold percentage of 7.4%. Last year’s exciting game between the New England Patriots and Philadelphia Eagles saw a record $158.5 million bet at Nevada sportsbooks though the hold percentage of 0.7% was among the lowest in history. Sportsbooks won only $1,170,432 despite the record setting betting volume.

The mixed result made it difficult to categorically say if sportsbooks had a ‘good’ or ‘bad’ Super Bowl. Volume was clearly down and that’s never good. All told, it was an 8% decline in betting action year over year. That’s the largest in over a decade and more significantly one of the few revenue declines since the end of the ‘great recession’ that gutted Nevada’s real estate market and gaming industry along with the broader economy. Since 2010, there was only one other year in which the Super Bowl didn’t experience an increase in betting handle (2015).

So why was volume down? Pundits found a lot of quick answers that didn’t pass analytical muster such as more states offering sports betting to their residents. Given the demographics of the newly opened betting markets in New Jersey, Pennsylvania, Delaware and elsewhere it was just a drop in the bucket in terms of overall betting handle on the Super Bowl. There’s a good case to be made that most of the betting in the new jurisdictions was ‘additional betting’ from customers that might not have been betting in the past. The reality of these new markets is that there’s little if any ‘pent up demand’ despite the hopes of state governments to the contrary. For the past couple of decades anyone who wanted to place a bet was able to place a bet through a variety of channels.

The more likely explanation has two parts. First, the changing profile of Nevada Super Bowl betting. It wasn’t long ago that the bulk of betting action on the Super Bowl was on the side and total of the game. Today, most of the money wagered on the Super Bowl is done on prop bets and through in-game wagering. The in-game wagering component might be the single most salient factor in Nevada’s revenue decline. It’s only been in the past couple of years that in-game wagering has really started to catch on with the ‘public’ and recreational bettors. The reality, however, is that for the ‘public’ scoring drives in game betting. A high scoring game will produce more in-game wagering interest among recreational bettors. It produces more in-game fluctuations in the point spread and total and is more exciting for prop bets like ‘Next Team to Score’. To paraphrase one Nevada bookmaker ‘recreational players don’t want to bet in-game when nothing is happening. No one is interested on the distance of the next punt’.

The increased hold percentage was good news for the books but there’s not much of a takeaway from it. The public was overly optimistic about the performance of both offenses. Even though ‘sharp’ money kept the total drifting downward the public bet the ‘Over’ as well as taking similar positions on many individual and team performance props.