Coronavirus: 2020 NCAA Tournament canceled & sportsbooks will take massive financial hit

When every major college basketball conference tournament around the country was canceled Thursday because of the coronavirus outbreak and powerhouse programs such as Duke and Kansas announced they would not compete in the 2020 NCAA Tournament if it was played next week as scheduled, it was simply a matter of time before NCAA president Mark Emmert called off the Big Dance.

Emmert announced around 4:20 p.m. ET that the Big Dance was indeed canceled – that verb being an important designation over postponed. It's an unprecedented decision. (The women's tournament also was canceled as well all remaining winter and spring championships -- i.e. College World Series and Frozen Four to name two others.)

While blueblood programs like Duke and Kansas will simply move on and be back contending for a national title next season, it's cruel for a school like Rutgers. The Scarlet Knights hadn't played in the NCAA Tournament since 1991 but had a good chance to get in on Selection Sunday.

This news will devastate sportsbooks everywhere – some got up-and-running just recently in states like Michigan simply to be ready for March Madness and cash in – in terms of a financial hit. More money is wagered annually on the NCAA Tournament than any other event; the Super Bowl takes the most as a single game, but the Big Dance is 67 games over three-plus weeks.

For example, Nevada sportsbooks took $498.7 million in wagers on college basketball and the NBA combined in March 2019 and won $36.5 million, according to Michael Lawton of the Nevada Gaming Control Board.  An estimated 70 percent of that handle, $349 million, was wagered on March Madness.

As a comparison, Nevada sportsbooks took a combined $154.7 million in bets on last month's San Francisco 49ers-Kansas City Chiefs Super Bowl 55 and won $18.8 million.

Not only do the sportsbooks not get that tournament revenue now, they have to refund any NCAA championship futures bets made since April 9, 2019 -- the day after last season's final when 2020 futures were posted. Refunds also must be made for recently posted props like "Will Team X get a bid to the NCAA Tournament" or "Will Team X reach the Final Four?" as well as futures odds to win the major conference tournaments.

Meanwhile, 85 percent of the NCAA's annual operating budget is via revenue from the NCAA Tournament thanks to billions from TV and marketing rights fees as well as ticket sales, etc. Does the NCAA have to return some of that money this year? Certainly all tickets will be refunded.

While the NCAA controls and hugely profits from the Big Dance, it does not have the same power over the College Football Playoff. The organization doesn't run the CFP or any bowl games and only sets the playing rules of those competitions.