With coronavirus COVID-19 concerns and precautionary measures continuing to mount, it was only a matter of time before the NCAA Tournament was canceled. That time came Thursday afternoon, when the NCAA announced March Madness would not take place. Even before the decision came down, sportsbook operators were bracing for it and the impact will be extensive.
Nevada Gaming Control Board senior research analyst Mike Lawton told Covers that basketball betting handle for March 2019 was a whopping $498.7 million. In previous years, it’s been estimated that 70 percent of March basketball handle was on NCAA Tournament games, which would equate to $349 million last year.
Sportsbooks held $36.5 million of the total March 2019 hoops handle, or 7.3 percent, which is a solid if not spectacular number. If there’s no March Madness, recovering from such a blow would be difficult.
“I think we were all expecting the tournament to be canceled at this point,” said Jay Kornegay, who oversees operation of The SuperBook as vice president of race and sports for Westgate Resorts. “It’s one of the biggest, if not the biggest, events of the year for us. It’s really difficult to quantify what it means to us, because there are so many parts of that revenue stream.
“There are so many incremental benefits of the tournament, not just for sportsbooks, but for the entire city.”
Indeed, Las Vegas as a whole gets a huge boost from March Madness traffic. Sportsbooks are the focal point, but food and beverage, shows, and all the other casino gaming options reap benefits from those traveling in to wager on the NCAA Tournament.
And with the expansion of legal, regulated sports betting, 15 other states are impacted, as well. That would include Illinois and Michigan, which just went live this week and anticipated heavy March Madness turnout.
The American Gaming Association is closely monitoring the situation, not just from a sports betting perspective but across the broader gaming industry. At this time, though, the AGA does not have impact estimates.
However, a 2019 AGA survey found that 47 million American adults would wager a total of $8.5 billion on March Madness. While the majority of that sum – $4.6 billion – was in the form of bracket pools, that still left a hefty $3.9 billion wagered through either legal sportsbook operators or online, with a bookie or with a friend.
Jay Rood understands this impact from his work in multiple jurisdictions. He was with MGM Resorts sportsbooks for 25 years, including more than a decade as vice president of race and sports, before leaving last spring to become chief risk officer for Bet.Works, a U.S.-based igaming and sportsbook platform.
Rood has seen plenty in his years behind the counter, but the NCAA's move Thursday was a bombshell.
"I was really shocked thaty they flat-out pulled the plug on the NCAA Tournament. I expected a two-week delay, then reassess," Rood said. "But I get that it's a major public health concern. Everyone is erring on the side of extreme caution."
Bet.Works provided the platform for The Score's entry into the New Jersey mobile sports betting market, and for the brick-and-mortar and mobile platforms for Elite Sportsbooks in Iowa. So Rood is dealing with the situation on those fronts, while certainly relating to what his peers in Vegas are going through.
"It's unprecedented. I know everyone is throwing that term out, and uncharted waters, but we really are kind of in that territory," Rood said. "Being in the regulated sports betting market, it's hard to pivot outside of the traditional sports or the non-sportinng events, because of the regulatory environment. We're not able to do that quickly."
Instead, American books have to lean on the slim markets that remain.
"Golf, NASCAR, the combat sports. We'll have to enhance our offerings on those events," Rood said. "When the dust settles, maybe by Monday, we'll see what leagues are left going forward. It's just wait-and-see like everyone else, how those leagues come back."
Indeed, Coronavirus implications extend far beyond the NCAA Tournament. The NBA suspended its season Wednesday night (two players have tested positive), the NHL followed suit Thursday, and Major League Baseball announced Thursday that it is delaying the start of the season – initially March 26 – by at least two weeks. If the NBA and NHL don’t resume, that adds to the impact on sportsbooks’ bottom line.
But the NCAA Tournament is far more significant, even more so than the Super Bowl, as the tourney stretches across three weekends. The 2020 Super Bowl between the San Francisco 49ers and Kansas City Chiefs posted Nevada handle of $154.7 million, and annually the game is the largest single-day sports betting event by a mile. But as Nevada Gaming Control board statistics show, March Madness handle dwarfs the Super Bowl number.
Elite Sportsbooks launched in August and had high expectations for its first NCAA Tournament.
"They were looking forward to their first big March Madness event, trying to replicate what you would find in Las Vegas," Rood said.
Kornegay stressed that while March without the Madness is hugely disappointing, there are much more important matters at hand as coronavirus is dealt with at the local, state and national levels.
“Just like everybody else, we’ve really enhanced our safety protocols,” Kornegay said. “It’s unfortunate what we’re dealing with. But at this point, it’s really about protecting our guests and team members.”
Rood's lengthy experience on the Vegas Strip has him well aware of what his former co-workers and industry peers are going through now and could face in the coming weeks and months.
"A lot of employees are gonna be impacted. This is a big time of year from a toke (tips) standpoint," Rood said, noting the usually massive first weekend of the tourney is a major factor in annual budget projections, too. "It's the biggest four-day event, and now it's wiped out. I'm sure we haven't heard the last of what's gonna happen on the Strip."
Patrick Everson is a Las Vegas-based senior writer for Covers. Follow him on Twitter: @Covers_Vegas.