Colorado Bettors Buck May Trend Of Operator Dominance

The Colorado Department of Revenue reported Thursday a gross revenue hold of 8.2% for sports wagering operators in May, making the Centennial State one of the few jurisdictions that month in which the house did not run roughshod on the betting public.

Colorado joined South Dakota and Nevada as the only states with operator win rates below 10% for May, with Arizona the lone state yet to publish numbers. That 8.2% win rate knocked the overall national hold for May under 11.3% (on $7.7 billion handle), likely putting the top two post-PASPA monthly holds, of 11.7% in September 2018 and September 2022, out of reach.

As a theoretical example, with $500 million handle, Arizona operators would need a hold of at least 18.3% on gross revenue to make a run at the all-time record. Arizona’s highest recorded hold is just shy of 12% in May 2022.

Sportsbooks in Colorado claimed $31.4 million in gross revenue in May from $385.2 million worth of accepted bets. Handle was up 6.9% compared to the same month in 2022, and gross revenue rose 15.8% as this year’s hold was nearly two-thirds of a percentage point higher.

The state was eligible to tax $22 million in adjusted gross revenue, resulting in an inflow of $2.2 million into state coffers. Year-to-date adjusted revenue is 127.7% higher than the first five months of last year, with the $11.7 million in tax revenue running $5.8 million ahead of collections in 2022.

Year-over-year handle is just about flat, with the $2.3 billion wagered through five months a mere $2.6 million behind 2022’s total. Gross revenue, however, is up 29.1%, as the 7.5% hold is 1.7 percentage points higher.

Colorado bettors doing better with parlays

In the five other states that publish both parlay handle and revenue — Illinois, Mississippi, Nevada, New Jersey, and Oregon — the quintet had a combined 23.7% hold on $422.8 million worth of such bets, resulting in $100.1 million in revenue. Nevada’s parlay wagering accounts for very little of its sports wagering numbers, and May was no different as bettors came out $10,000 ahead on just $84,317 handle.

The house still collected plenty of revenue from parlays in Colorado — the $11.4 million was the largest source of operator winnings and accounted for 36.4% of all gross revenue. But bettors “limited” the house to a 17.5% win rate on $65.3 million in wagers. Had operators matched the 23.7% hold from those states listed above, they would have reaped more than $3.9 million in additional revenue, and the hypothetical revised total of $35.4 million in gross revenue would have pushed the hold to 9.2% and bumped the national hold above 11.3%.

The public’s respectable measure of success on parlays has stood out throughout 2023 in Colorado, where the hold for parlays is 15.3% on just shy of $400 million handle through the first five months. That operator win rate lags notably behind Oregon (22.1%), Mississippi (21.9%), Illinois (19.8%), and New Jersey (19.7%), while Nevada’s massive 39.4% hold is built on less than $5 million handle.

Nuggets bump, table tennis resurgence

Interest in the Denver Nuggets as they marched to their eventual NBA title was clearly evident in May, with year-over-year NBA handle up 21.7% to $124.1 million. The Nuggets’ success and local fans’ backing of them presumably combined to keep operators in check, as the house had a 4.1% basketball hold to claim $5.1 million in revenue, down 5.8% from May 2022.

Long a popular niche sport for wagering in Colorado, table tennis handle surged 39.5% from April to $9.3 million, the highest monthly total since operators accepted $10.3 million worth of bets in October 2021. Revenue did not similarly surge, though, as the 6.2% hold was more than two full percentage points lower than the previous month and resulted in a net increase of less than $4,000 in revenue to $577,000.

Operators collected $4.9 million on baseball bets with a 5.3% win rate. Year-over-year revenue was up 31.4% there, easily outpacing the 0.8% rise in handle to $91.7 million.

Tennis continued to provide a steady stream of revenue to operators, who collected $2.7 million in winnings from $28.6 million handle for a 9.5% hold. Sportsbooks have claimed at least $2 million in tennis revenue each month in 2023, totaling $11.3 million with an 8.8% win rate on $128.2 million worth of bets.