Under non-pandemic circumstances, on Monday night the 2020 NCAA men’s basketball national champion would have been crowned at Mercedes-Benz Stadium in Atlanta. Instead, Atlanta is now becoming one of the COVID-19 epicenters in the U.S.
It is impossible to project precisely how much revenue legal U.S. sportsbooks lost as a result of the NCAA’s cancellation of March Madness. The number that we have arrived at is disputable, and will be disputed. However, it’s at least a reasonable estimate intended to illustrate the magnitude of the impact on the growing U.S. legal sports betting industry.
Let’s start with 2019, when the Virginia Cavaliers men’s basketball team won its first NCAA championship, thanks to some stunning comebacks. The American Gaming Association projected the 2019 tournament would attract $8.5 billion of wagers, the majority of which would be placed either illegally or through common NCAA bracket pools among friends; The AGA/Morning Consult study estimated that 4.1 million people would wager approximately $885 million through legal sportsbook channels (online and in person).
Since then new legal markets have opened — very recently in Michigan and Illinois, only to shut down the same week in accordance with COVID-19 sheltering measures. Those in operation before this year have boomed, such as Indiana where the monthly handle record reached $187.1 million in February. Other states to welcome legal sports betting since the conclusion of last year’s NCAA tournament include Iowa, New Hampshire, New York and Oregon. And that is in addition to the increased availability of mobile betting apps in Pennsylvania and West Virginia.
New records were on deck
The vast majority of March Madness betting still takes place offshore or with underground bookies, but with New Jersey now rivaling Nevada and regulated sports betting increasing coast to coast, the legal March Madness betting handle from the 2020 NCAA Tournament would have marked a new record.
Even with modest 10% growth year-over-year with the aforementioned expansion of new legal markets and additional channels in existing ones, the pool of bettors would grow to 4.51 million people and an estimated $973.5 million would be wagered at legal books.
Considering the house commonly holds (profits) between 6-8 percent of their handle, sportsbooks would have lost out on somewhere between $58 million and $77.8 million in March Madness revenue alone. Let’s split the difference and call it $68 million. And that’s separate from all the many voided futures bets that the sportsbooks would have rung up.
Keep in mind that results from wagering on March Madness are much less variable than bets placed on the Super Bowl, which the NCAA tournament eclipses in overall handle. The tournament consists of 67 total games versus just one for the NFL finale, so the house may take some shots to the chin along the way but still always wins.
A closer look at the biggest markets
Some of the largest legal markets such as Nevada, New Jersey, and Pennsylvania were all set to break individual records in March before the global coronavirus pandemic wreaked havoc.
To estimate what March 2020 sports betting handles would have amounted to absent the global health crisis, we looked at the growth rate from February 2019 to February 2020 for each state and applied the same rate, respectively, to March 2019 betting handles.
There is a caveat to note in that 2020 is a Leap Year and February had one additional day — a Saturday — that would have helped drive some of the increase in handle that month.
Nevada
Nevada, the home to U.S. sports betting capital Las Vegas, set a 10th consecutive annual record with a sports betting handle of $5.3 billion in 2019. Off to another hot start in 2020, Nevada’s February handle increased 6.3% from the year before. If the same held true in March, Nevada would have taken a record $634.4 million in bets.
It would be impossible to pinpoint exactly how much of the total March (and early April) handle would be attributable to college basketball wagering, considering it’s not parsed out from NBA contests, and some conference tournaments did proceed to conclusion during early March. Suffice to say, it’s a lot, perhaps 30-40%.
| State | Feb-2019 | Feb-2020 | Growth | March-2019 | March-2020 Projections |
| Nevada | $458.6M | $489.1M | 6.30% | $596.8M | $634.4M |
New Jersey and Pennsylvania
With legal sports betting still in its infancy elsewhere, New Jersey and Pennsylvania have grown rapidly relative to Nevada. In fact New Jersey’s total handle outstripped Nevada’s in three summer months in 2019.
New Jersey’s February 2020 handle, which included the second Super Bowl since the state successfully challenged PASPA, was $494 million, up 54% from 2019. East Coast bettors were on pace to flood the Garden State again and wager more than $575 million at online and retail sportsbooks this March.
What were Pennsylvania sportsbooks expecting during their first March Madness with mobile wagering? If February was any indication, Pennsylvania would have brought in about $465.9 million of action, more than 10 times the $44.5 million bet strictly through brick-and-mortars a year ago.
| State | Feb-2019 | Feb-2020 | Growth | March-2019 | March-2020 Projections |
| New Jersey | $320.5M | $495M | 54.40% | $372.5M | $575.1M |
| Pennsylvania | $31.5M | $330M | 947.60% | $44.5M | $465.9M |
Hidden impact
“March Madness is a significant event on the sports betting calendar, and without it, we saw a substantial loss,” Elisa Richardson, head of communications and public relations at BetMGM, told Sports Handle. “That said, we’re a young business, who commenced operating in three new states in the month leading up to the tournament’s start. We’re still seeing exponential growth month on month, so BetMGM’s year-on-year comparisons and annual projections are not our current focus.”
Unfortunately, March Madness contests weren’t the only games on hiatus this year. Sportsbooks also missed out on the spillover effect from having bettors reveling in lounges and betting elsewhere on the board.
In a normal year, tourists visiting Las Vegas or Atlantic City for the NCAA Tournament place futures bets for NFL, MLB and golf while they are in town. Or online, while they’re thumbing through other contests on mobile devices.
“It’s not just daily stuff like NBA and NHL,” one industry source explained. “The hidden story is the other stuff that is played just because people are here. Probably 30% of Masters bets are made during the [NCAA] tourney.”
The PGA Tour has postponed the Masters to Nov. 12-15 at Augusta National Golf Course — also in Georgia. Of course, everything is subject to change once again. If the NFL season begins sometime between September and November, the fall months will be quite a sports spectacle and experience a convergence of major events never seen before. Monthly betting handle records may be set then, but certainly not enough to make up for the amount of sports and sports betting entertainment lost.
Until then? You can bet on Belarusian soccer, table tennis and darts, and the UFC defiantly presses on.
