According to a report released on July 8 by the North Carolina State Lottery Commission, the state’s sports betting revenue experienced a considerable dip between May and June, decreasing by almost 26%. This decline is not entirely unexpected as it coincides with the traditionally slower summer sports calendar. Similar trends were observed in other states, with New York seeing a 34% drop in mobile wagering during the same period.
Promotional bets made in North Carolina totaled $16.5 million, while the gross gaming revenue (GGR) reached $40.3 million. It is important to note that operators in North Carolina are not allowed to deduct promotional play from their revenue, which distinguishes rules there from some other states. The report also highlighted that operators maintained a 10% hold, a decrease of 2% compared to May. Additionally, GGR is taxed at an 18% rate in the state.
In June, player winnings amounted to $354.7 million, while operators canceled $3.2 million in bets. This cancellation rate accounts for almost 1% of the state’s overall betting handle. Cumulative data since the launch of sports betting in North Carolina reveals that the state has handled $2.2 billion in bets and generated $275 million in GGR.
March remains the peak month for North Carolina sports betting, bolstered by its initial launch and the excitement of the NCAA men’s basketball tournament. Bettors wagered a record $659 million, and operators enjoyed a substantial $66.5 million in GGR. This surge was partly driven by the performance of local college teams; NC State made a surprising run into the Final Four, and both Duke and North Carolina advanced past the first two rounds of the tournament.
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Flutter Entertainment, the parent company of FanDuel, has recognized North Carolina as one of its most successful state launches. In its Q1 earnings presentation in May, Flutter’s CEO Peter Jackson highlighted the rapid success of the North Carolina market. Flutter’s CFO, Paul Edgecliffe-Johnson, echoed this sentiment, although he pointed out that the aggressive promotional strategies required to secure market share come at a cost. He remarked, “We’ve won the state, we’ve signed up one in 20 adults, but obviously it comes with a cost. Where there’s more business, that’s where you have the most promotional intensity.”
Currently, several major sports betting operators are active in North Carolina, including Bet 365, BetMGM, Caesars Sportsbook, DraftKings, ESPN Bet, Fanatics, and FanDuel. State laws mandate that operators must partner with a professional sports team, NASCAR, or the PGA Tour to operate within the state.
The report’s findings reflect the challenging nature of maintaining consistent sports betting revenue across different times of the year. The early summer months are notably slower, as fewer major sporting events take place compared to the high-energy periods of spring and fall when basketball, football, and other major sports are in full swing.
As the industry evolves, operators in North Carolina may need to adapt their strategies to mitigate the impact of seasonal variations. Possible approaches include diversifying promotional offerings or expanding partnerships beyond their existing sports affiliations to include more sports or entertainment events that draw consistent wagering.
Furthermore, it will be essential for operators to find a balance between attracting new bettors and maintaining profitability. The current restriction on deducting promotional play poses a unique challenge that requires innovative thinking to navigate successfully.
North Carolina’s sports betting landscape is still relatively new but has shown promising initial success. As operators and regulators gain more experience, they should be better positioned to handle fluctuations and enhance the stability of revenue streams year-round.
In conclusion, while the dip in sports betting revenue between May and June in North Carolina aligns with broader seasonal trends, it underscores the need for ongoing strategy adjustments in this rapidly evolving industry. The promising early months, highlighted by March’s substantial handle, indicate the market’s potential. However, operators must continually innovate and adapt to sustain growth and profitability throughout the year.
