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Perhaps the saying “timing is everything” can often be overrated, however involving launching a major business it cannot.
Take the small US state of New Hampshire launching legalized sports wagering, for example. Thus far sports gambling has netted the Granite State an impressive $4.6 million in tax revenue since launching last December. Considering its size, that is an impressive figure.
The Commission’s spokesperson said:
We were off to a terrific start in 2020 before COVID-19 hit, resulting in sports more or less shutting down worldwide, but with the sports world coming back this past summer, we have been able to build back up momentum quickly.
The state says since becoming legal in late December 2019, a total of 52,000 sports bettors have placed more than $200 million in bets. Under a unique six year exclusive contract with Massachusetts-based DraftKings, the state collects half of all profits, which are designated toward the state’s education trust fund.
New Hampshire’s take is quite substantial compared to larger states like Colorado, which also has been successful. Colorado has roughly 3X the population and about an even GDP yet collected less than a million dollars in tax revenue in only a five-month time span. That equates to about 25% of what New Hampshire has accomplished.
There are basic reasons for this. First, Colorado sportsbooks compete heavily with one another offering promotions and the best-priced odds possible leading to much smaller revenue for the sportsbooks. That results in a much smaller tax income for the state. Also, Colorado only gets to keep 10% of the total gross revenue from the competing sportsbooks.
New Hampshire decided early on to let DraftKings act as a heavily regulated monopoly, where the state can maintain control over the odds with regulations. This allows DraftKings and New Hampshire to both receive more in terms of revenue and results in significantly more dollars being appropriated to the state and for education.
The Coronavirus is expected to continue its difficult shadow over the industry through at least early 2021, but forecasts remain high for New Hampshire building upon its sports gambling success.
Maura McCann, director of marketing for New Hampshire Lottery, in response to a Concord Monitor query, wrote:
While it is difficult to make projections given the overall circumstances, the New Hampshire Lottery is anticipating sports betting will generate about $10 million in total net profits for education in the Fiscal Year 2021, assuming the sports world remains active and we avoid another shutdown.
That statement refers to the period last March when the entire sports world came to a grinding halt with no alternatives for US sports bettors but Russian ping pong, darts, and some international soccer.
Beyond the popularity of online wagering, residents in New Hampshire and visitors have two nice sportsbook locations to bet within the state.
One location is in Seabrook NH and is nicknamed “The Brook”. This spot provides food & drink as well as a top-notch casino and sportsbook. It is well designed with plans to cultivate as a gathering spot for the more social opportunity once the path past COVID-19 is totally cleared. The second impressive location is at the Southside Tavern, in Manchester, New Hampshire.
Overall, the choice of mobile/online wagering will still dominate regardless of the circumstances in 2021, however, New Hampshire should build upon their momentum in both categories. Also, other states will likely keep a close eye on New Hampshire’s business model as a potential plan to consider while deciding upon new sports wagering legislation.
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Larry Gibbs is both a seasoned journalist and a respected online gaming industry consultant. His wry commentary & sharp analysis have appeared in numerous top gaming and sports wagering publications. He has also served as Vice President of US Gaming Services, a marketing research organization with 15 years of experience in US online wagering. He has spoken at noted gaming industry conferences including G2E, GiGSE, and NCLGS.
Email: [email protected]
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