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State of the Union: US Sports Betting Update – Nevada Plays Second Fiddle to New Jersey Once Again

Nevada’s sports betting handle grew 16% year-on-year to reach $287.8 million during August, according to new figures from the Gaming Control Board. It was an impressive performance during a quiet month for sporting action, but it left Nevada’s handle smaller than New Jersey’s for the third time in four months. New Jersey had already reported a robust handle of $297.3 million for August and it might now officially be considered the largest market in the U.S. sports betting industry.

It joined Nevada in offering sports betting last year after winning a protracted legal battle with the sports leagues. The Supreme Court Struck down PASPA in May 2018, paving the way for the remaining 49 states to legalise sports wagering. Sportsbooks began launching in New Jersey last summer and it surpassed Nevada’s sports wagering handle for the first time in May 2019. The Silver State battled back and regained the lead in June. New Jersey then reported revenue of $251 million for July, while Nevada could only manage $235 million, leaving the Garden State as top dog once again.

Now it has prevailed again in August and it will be interesting to see if it holds onto the crown during September, which is a much busier month due to the beginning of the new NFL season. It is hugely encouraging for Garden State operators, but Nevada should still be pleased with a strong performance during August. For a mature market to record 16% year-on-year growth is a great result.

Nevada Bettors Struggle with Football and Parlay Bets

Operators in the Silver State should also be please to hold onto revenue of $18.7 million, an increase of 48.4% on the $12.2 million they held last August. As it is a quiet time in the U.S. sporting calendar, baseball accounted for the majority of wagers. Sportsbooks held a win of $6.7 million off a handle of $178.9 million on baseball. Football was more lucrative for the industry, as the sportsbooks held $12.7 million off a handle of $72.3 million, a win of 17.5%. There were $5.6 million in basketball bets, and operators made a small loss on hoops, while bettors lost 71% of the $700,000 they wagered on parlays.

The sports betting calendar ramps up massively between October and March and New Jersey has a great chance of holding onto its crown. Nevada took a record-breaking handle of $596.8 million in March 2019, and the race is now on to become the first state to break through the $600 million barrier in a single month.

New Jersey might lose a little bit of momentum now that neighbouring Pennsylvania is offering online sports betting, but it should continue to attract New Yorkers. Only a few upstate casinos are permitted to offer retail sports betting, and people in New York City are likely to visit New Jersey if they want to bet on sports in a legal setting. Pennsylvania could yet surpass both New Jersey and Nevada, as it has a larger population and seven professional sports franchises, but for the immediate future it looks like a straight fight between the Garden State and the Silver State.

FanDuel Continues to Dominate

FanDuel was dominant yet again, accounting for $11.8 million of New Jersey’s $18.7 million revenue in September. The majority of betting revenue, $9.3 million, came via online wagers, following a statewide trend. “We have a great product that offers customers an unsurpassed sports experience and that is what has made it the number online sportsbook in New Jersey and Pennsylvania,” said FanDuel spokesman Kevin Hennessy. FanDuel only just launched in Pennsylvania, but it has already exceeded local operators SugarHouse, Rivers and Parx in terms of handle.

Paddy Power Betfair purchased FanDuel last year to front its sports betting operations in the US. It proved to be an inspired decision, blending the strength of the FanDuel brand with Paddy Power’s expertise in the field of sports wagering. Paddy Power Betfair recently rebranded as Flutter Entertainment, and it has just agreed a $6 billion to buy PokerStars owner The Stars Group. Under the terms of the deal, Flutter shareholders would own 54.64% of the combined group, while TSG shareholders would own the remaining 45.36% of the shares.

Creating a Behemoth

Canadian firm TSG made its name via PokerStars, but it branched out by launching sports betting site BetStars. Last year it bought British online betting giant Sky Bet in a cash and stock transaction valued at $4.7 billion. It declared at the time it reported that the combination would result in the world’s largest publicly listed online gaming company. Flutter Entertainment is now a bigger company, but the two joining forces will create an absolute behemoth, bringing Paddy Power, Betfair, FanDuel, Sky Bet, BetStars, Fox Bet and PokerStars all together under the same umbrella.

TSG’s FOX Bet brand has started making inroads into the U.S. sports betting industry, and it could help Flutter consolidate its market leading position.  “The combination represents a great opportunity to deliver a step change in our presence in international markets and ensure we are ideally positioned to take advantage of the exciting opportunity in the US through a media relationship with FOX Sports as well as our development of US sports betting through Flutter’s FanDuel and TSG’s FOX Bet brands,” said Flutter chief executive Peter Jackson. “We are committed to these two high quality brands to drive the growth of the combined group in the US.”

On a performance basis, the combined group’s annual revenue would have been £3.8 billion ($4.7 billion) in 2018, making it the world’s largest online betting and gaming operator. “The combination will turbocharge our existing four-pillar strategy and provide world-class capabilities across sports betting, gaming, daily fantasy sports and poker, as well as greater geographical and product diversification,” added Jackson. “We believe the combination of Flutter and TSG will deliver substantial value for shareholders. We will have an exceptional portfolio of leading recreational brands and best-in-class products on industry-leading technology platforms.”

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