unters at the racetrack and the oval won’t be put off by tough economic times, while casino and lottery customers will cut back over the next two years, a report predicts. Players actually bet more a year ago: the "handle" or total amount wagered this year was about us$ 286 million, versus us$ 306 million bet last year. But a slightly higher house edge this year (6.4 % versus 4 %) accounted for the higher win total.
Between parlay cards and board action, football betting accounted for more than half of all sports revenue. The sports books won us$ 4.1 million from bettors, up 27 % from last year, and us$ 5.4 million from parlay card players, down about 21 %.
Revenue from horse and sports betting is expected to grow by 11.9 % this financial year, as the sector rebounds from the effects of equine influenza, a report by business analyst IBISWorld says. Its industry analyst Angela Kidson said the racing industry had experienced a loss of 9.3 % in revenue over the 2007/08 financial year. "It’s rebounding from (fiscal) 2008 which was a terrible year for them with the equine influenza," Kidson said. "That hit the industry very hard: race numbers were down 16 %."
In the 2009/10 financial year, the sector is expected to grow at a slower rate of around 2.5 %, buoyed by new interactive digital pay-TV betting sites. In the casino sector, revenue is expected to fall by 1.8 % followed by another 2.3 % drop by mid-2010. Lottery revenue will decline by 1.2 % this financial year and a further 1.5 % in 2009/10. "I think most people are going to put their money into savings or pay off credit cards," Kidson said.
The report anticipates that further interest rate cuts and the federal government’s stimulus initiatives will increase average household disposable income by 4.98 % early next year. But only a minimal portion of that is likely to be put into pokies or spent on lotto tickets, as disposable incomes are forecast to fall again in late 2009.
While sports book operators are mostly pleased with the positive revenue results for October, several felt there were areas that could stand improvement. One of those areas is in the house edge or "hold" percentage, the amount retained by the books after all winning bets are paid off.
The football hold percentage in October was only 1.85 %. Traditionally, sports books hold about 5 % on all football bets for the season. Over the past five years, the season-long hold dipped below 5 % only once, in 2005.
Some experts attribute the lower hold to sharper players – bettors have access to more information about a game than every before. But others say that, no matter how sharp the bettor, the line maker has to be every sharper, thus making a more difficult line in which to bet.
"When they put out a ‘soft’ line, or one that is completely out of whack, the players will jump all over it," said the supervisor of a locals-oriented Las Vegas sports book. "When we take one-sided betting action, and all that action is on the right side, it’s probably because the line was off to start with."
The supervisor, who spoke on condition that his name or casino not be named, cited a line a few weeks ago, in which the San Diego Chargers were made a 5½ point favorite over visiting Atlanta. From the outset, most of the money came in on Atlanta, which drove the line down to 3 points or less, and Atlanta won the game relatively easily.
"The game should have opened a pick or the Chargers a small one- to two-point favorite," the supervisor said. "In this instance, the bettors and handicappers knew more about the teams than the people who assign the betting odds."
Not all bookies agree. One sports book director noted that setting lines is a process that changes throughout the season, with swings in both directions occurring. "These trends tend to even out over the course of the season, and I expect by end of January we’ll see the same 5 % hold that we’ve enjoyed in prior years," he said.
One trend that some books would like to see is an increase in parlay card action. While parlay cards actually won more money than board bets for casinos in October (us$ 5.4 million versus us$ 4.1 million), the betting handle on cards was significantly less.
Only us$ 13.4 million was played on parlay cards, just a fraction of the us$ 221 million bet on football off the board. The difference was the parlay card hold percentage, a whopping 40.5 percent in October.
No other game in the casino has such a high hold percentage – keno, at 30 %, and Three Card Poker at 25 %, come close, but nothing wins at the rate of parlay cards. That’s why it’s perplexing to some why parlay cards, especially during football season, aren’t marketed more aggressively or offered more liberally. For instance, this week most parlay cards in town failed to include the upcoming college bowl games, which features 34 games over the next four weeks.
"Granted, the first bowl game isn’t played until next weekend, but there are plenty of tourists in town who would like to play a card and won’t be back any time soon," said a sports bettor at the Las Vegas Hilton, which along with Boyd properties, was astute enough to print cards with the bowl games.
For their part, several sports book directors said they plan to put out cards this week with the bowl line-up, and that they held off because they wanted the betting lines to stabilize, and that they didn’t expect much action so early in the bowl season.
Nonetheless, the more bets on a parlay card and the longer the cards are available to players, has to be a priority for sports books. After all, it’s hard to ignore a 40 % winning edge.