Iowa casinos and sportsbooks post record $1.8B net revenue in FY22

According to State Racing and Gaming Commission data posted Thursday, Iowa’s 19 state-licensed casinos reported adjusted gross revenue of nearly $1.78 billion through their slot machines and table games in the last fiscal year. They also delivered a separate sports wagering handle of over $2.4 billion that netted them nearly $140 million in receipts for the 12-month period ending June 30.

"That was the highest year on record in terms of adjusted gross revenue," said Brian Ohorilko, administrator of the State Racing and Gaming Commission, as reported by The Gazette. Gamblers also placed a record amount of bets on both casino and sports games in the last fiscal year, with wagers topping $4 billion, or an average of nearly $11 million a day.

Casinos in the state reported increased attendance during the first part of the fiscal year as the Iowa and U.S. economies rebounded and Covid-19 restrictions eased. Venues saw increased attendance with more than 17.4 million admissions in fiscal 22, up 6.5% from the previous fiscal year, but still down from 22.8 million through the turnstiles during the record year of fiscal 2012.

The top venue in terms of revenue for FY22 was Prairie Meadows Racetrack & Casino, at $49 million. It was followed closely by Horseshoe Casino Council Bluffs, at $45.7 million, while Ameristar II placed third at $36.4 million. Riverside Casino and Golf Resort ($24.9 million) and Rhythm City Casino ($22.8 million) round out the top five.

Venues paid over $349 million in state taxes on gambling at their facilities and $9.6 million in state taxes on sports betting proceeds. In addition to casinos, state proceeds from lottery profits stood at $89.7 million on nearly $400 million in sales through May.

The Iowa Lottery Authority is expected to issue its 12-month financial data next month, a revised total that will push overall gambling in Iowa for fiscal 2022 well above $4.2 billion. However, due to the increase of cost in fuels and goods on account of inflation hitting a 40-year high, casino betting has slowed down in the last three months.

Wes Ehrecke, president and CEO of the Iowa Gaming Association, a trade group for the state's licensed casinos, attributed the increase in revenues and admissions to pent-up demand during the pandemic and the public viewing Iowa’s casinos as “premier entertainment destinations" where they felt comfortable and safe during Covid times.

But with inflation on a rise, casino admissions in the fourth quarter of fiscal 2022 were 13% below the average admissions for all fourth quarters since 2010. "It is not possible to determine whether admissions in the future will rebound or whether a new normal can be expected," says the latest report from the state’s Fiscal Services Division.

Ehrecke said the revenues will be "tough to replicate," but show "a robust gaming industry in Iowa … that people enjoy coming to.”

Warhorse Casino Lincoln groundbreaking

It is expected for Iowa casinos to face further headwinds in the coming fiscal year from a slowing economy and out-of-state competition. Nebraska officials last year approved rules for casinos to operate in the state, and ground was broken last week on a temporary casino at the Lincoln Race Course with hopes to open in September. Companies have also announced plans for casinos in Omaha and South Sioux City in Nebraska and Hastings, Minnesota.

In terms of sports betting, more than $2.4 billion was wagered in the state for the fiscal year ending in June, nearly double that of the prior fiscal year. More than 90%, or $2.2 billion in wagers, were placed using online apps after Iowa’s law changed on January 1 to allow betting over electronic devices without requiring players to first travel to a casino to set up an account in person.

"That threw the door open for sports betting in Iowa and numbers have rocketed to records since then,” said Russ Mitchell, an analyst for PlayIA.com. "You could literally sign up for 17 different sportsbooks right now and compare odds from one sportsbook to another … and maximize your success that way. That really ramped up the advertisement. That’s why you saw a lot of DraftKings and FanDuel ads offering free play dollars and promotional credits," he added, according to The Gazette.

Iowa casinos and their sportsbook partners collected $122.4 million in sports bets for the month of June, a 10% increase from June a year ago, showing inflation hasn't hit this segment. Mitchell predicts that casinos and sportsbooks will see an increase in the upcoming months with the return of NFL and college football.