Monday, February 13, 2012

Basketball the Savior of Nevada Sports Books in 2011

By Micah Roberts

Football was a down year for Las Vegas sports books in 2011
The Super Bowl may have come and gone, but that doesn’t mean the excitement in Las Vegas sports books goes away. In many ways, the excitement level is just beginning as college and pro basketball can finally take center stage.

Many recreational bettors have to get football fully out of their system before they start concentrating on hoops, but when they do, they fire repeatedly on a daily basis. And in 2011, it was that type of play that salvaged some positives in an otherwise down year for Nevada sports books. Who would have ever thought in this age of football being America’s sport that basketball would reign with the best numbers in the books?

Nevada Casinos won $44.2 million (3.3% hold) in the football category, which includes both college and pro, according to Nevada Gaming Control Board statewide numbers released last week. Meanwhile, pro and college basketball brought in $48.8 million (6.6%) combined to the bottom line showing just how important these next two months are to the sports books.

Granted, parlay cards generated $17.6 million in win for a whopping 28% hold -- the majority of play of which comes during football season, and football also wrote more action on the year. But many people are astonished to believe that basketball actually has that type of impact on a comparative level with football in the sports books.

“These next eight weeks are always huge for us,” said South Point sports director Bert Osborne. ”Between the college conference tournaments coming up and all the nightly action between the pros and college, our book is jumping Monday through Friday more than anytime of the year.“

To give another feather in the NBA’s cap of importance to the state, you also have to factor in that each NBA team lost 16 games on the season, which would have been played in November and December of 2011. The regular season didn’t start until Christmas day which cost sports books collectively an estimated $2-to-$3 million in win.

When there was a threat of losing the NBA season due to labor issues, it didn’t come close to bothering the masses like the football lockout did, but every sports book director in town was scrambling to adjust their green sheets as each day passed without them.

“We don’t have a real estimate on what the delay of the NBA season cost us in 2011, but it does help that we do get some of those games back this year with their compressed schedule,” said Osborne.

Pro football attracts a broad level of fans and crosses over into all areas, like grabbing the attention of our grandparents or perhaps our priest, but where basketball comes close in catching football is that there is more to offer.

Football is only once a week while basketball is daily. Hoop fans may be less in numbers as a group, but at the betting windows they make up for the differences because of all the daily wagers where money is constantly churning rather than waiting weekly for the big Saturday or Sunday action.

College basketball is going into the final stretch run over the next four weeks and then the March Madness begins where every sports book will be rocking with consecutive days of excitement. And not to be forgotten, this year’s version of the NBA may be as entertaining as ever on a nightly basis with their condensed schedule where we see teams playing four games in five days on a regular basis.

The NBA also got a surprise marketing gift with Jeremy Lin taking over New York during a five-game winning streak, sparking life into an otherwise unmotivated lackluster team. It doesn‘t hurt that New York, the media capital of the world, has fueled the popularity of the second year player out of Harvard. Lin’s instant stardom, now known as ’Lin-sanity’, is almost at Tim Tebow type of proportions and has made everyone want to watch, all of which has also translated through the betting windows in Las Vegas.

2011 Final Statewide Sports Book Numbers

As a whole, Nevada sports books won $140 million (4,8% hold), a 6.8% decrease from 2010 with most of it due to football (-21.5%), baseball (-13.9%) and believe it or not, parlay cards (-7.35%) were also higher. The football and parlay card decreases this year has more to do with the public getting it handed to them in 2010’s NFL season while having several more stellar weeks in 2011, including handing the sports books a miniscule win in the Super Bowl with the Packers winning.

“We’ve been accustomed to expect about three to four huge weeks out of the 17 annually during the pro football season and last season we had only one,” said Osborne who also noted that college football was consistently strong for the first seven weeks of action.

The sports books started out doing quite well in baseball with several teams like the Pirates and Royal playing competitive ball in the early going, much to the dismay of the bettors. But the bettors got their revenge in late August and September when four-team parlays were regularly hitting with the Rays, Phillies, Brewers and Cardinals.

And then the big bomb hit when the Cardinals paid out at some sports books with 250-to-1 odds to win the pennant and 500-to-1 to win the World Series.

It’s always a big win for the sports books when a favorite like Yankees win the World Series. Even though they may have the most tickets written on them, or second most -- Cubbies usually lead that category, they have so much volume from the season to overcome payouts of 10-to-1 or less.

Most sports books build in an average theoretic hold in their futures at around 37%. No matter how high you make the hold percentage, 500-to-1 is going to do some damage.

The NGCB lists one of the categories as ‘Other‘ which includes combined revenues of the NHL, Soccer, Boxing, Golf and NASCAR. That category dropped 24% below 2010 with much of that due to the World Cup being missed. Because of the Euro Cup this summer we should see a boost in revenues for this category in 2012.

$140 million is a lot of cash, but to put the sports book’s contributions to the casino in perspective, consider that Nevada casinos had $10.7 billion in revenues. It may be the most exciting place to be in every casino, but it’s got a long ways to go before it can match penny slots.

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