The budding New Jersey sports betting market enjoyed its best ever performance in November as operators generated $21.2 million revenue on a handle of $330 million. The Garden State ushered in a new era of sports wagering on June 14 after the US Supreme Court struck down PASPA. Since then the handle has shot up on a month-by-month basis and New Jersey could soon steal Nevada’s crown as the sports betting capital of the US.
Garden State sportsbooks took a handle of $40.6 million in July, the first full month of trading, and that rose to $95.6 million in August. It soared again to $184 million in September as the football season began, and it hit $260 million in October, before rising to $330 million in November. Nevada, the only state that was permitted to offer sports wagering before PASPA came crashing down, enjoyed a record handle of $571 million in September and that dipped to $530 million in October. It has not yet released its November figures, but New Jersey is hot on its heels.
Nevada’s sports betting industry is extremely mature, so New Jersey’s legislators will be pleased to see their nascent industry nipping at its heels already. States bring in cash to reinvest in public services by taxing sportsbooks’ revenue, so they only win if the books win. New Jersey’s politicians will therefore be pleased to see that revenue rose from $11.7 million in October to $21.2 million in November. A number of NFL results went against the sportsbooks in October, as they took a battering on football and held just 4.5% of the money wagered. In November, the punters were not quite as successful and sportsbooks held 6.4% of the larger handle, further bolstering the state’s coffers in the process.
Online is King in the Garden State
More than 70% of sports bets were placed online in November, equating to $238 million, and the rest was at brick and mortar sportsbooks in Atlantic City and Monmouth Park. It is interesting to note that DraftKings and FanDuel, the daily fantasy sports providers that thrived when sports betting was illegal in the vast majority of the US, have quickly established themselves as the market leaders in the New Jersey market.
In the Garden State, each online sportsbook has to operate on the licence of a physical casino or racetrack. Brick and mortar operators like Borgata and Harrah’s can have up to three different online sportsbooks on their licences. FanDuel operates on the licence of the Meadowlands racetrack and it took online revenue of $4.4 million in November. It also operates a retail sportsbook at the racetrack, which is just half an hour from the heart of Manhattan and next to the stadium where the Jets and the Giants play their home games. That earned $2.6 million in revenue, making it the best performing retail sportsbook in New Jersey.
DraftKings operates on the licence of Resorts in Ocean City. The physical sportsbook there made just $158,332 in November, but online revenue was $7.2 million. The figures are clouded, because two online sportsbooks operate on that licence: DraftKings and Bet Stars, which is part of the Stars Group empire that now owns Sky Bet. However, it is safe to assume that the bulk of that revenue went to DraftKings, as it was the first online sportsbook to launch in the Garden State and it has established itself as the market leader.
Bally’s Wild Wild West made a retail loss of $26,557 in November and the two online operates on its licence – Caesars and 888 – made just $205,046 in revenue between them. It shows how competitive the market in New Jersey is, and brand loyalty towards DraftKings and FanDuel is clearly having an impact. The William Hill retail sportsbook at Ocean Resort in Ocean City was the second highest earning retail outfit as it made $1.9 million, while the William Hill book at Monmouth Park made revenue of $1.16 million. The only other operator to suffer a loss was Harrah’s, whose retail book was $124,260 in the red. However, you should also assume that the extra footfall generated by sports wagering has helped boost sales of food and drink and so on inside the casinos.
Pennsylvania Gaining Traction
Neighbouring Pennsylvania has a long way to go before it can begin to rival New Jersey, but the potential is certainly there. It is the fifth most populous US state, with 12.8 million residents, while New Jersey is 11th with 9 million, and Pennsylvania has the sixth highest GDP in the country. Sports betting in the Keystone State began in November, when Hollywood Casino at the Penn National Racecourse in Grantville flung open its doors. Now two more have joined the party, as Rivers Casino in Pittsburgh and SugarHouse Casino in Philadelphia began test periods on Thursday and will officially open on Saturday.
Greenwood Gaming was expected to be the second operator to launch sports betting, but books at its Parx Casino in Bensalem and South Philly Turf Club in Philadelphia have been delayed. That has allowed RSG, which owns SugarHouse and Rivers, to steal a march. SugarHouse is located in downtown Philadelphia and it is the first sportsbook to open in the sixth biggest city in the US, so it could enjoy a strong few weeks before any competition arrives.
All Aboard the Sports Betting Bandwagon
There are now eight states offering sports betting in the US, and Minnesota could be among the next to jump aboard the bandwagon. Republican Senator Roger Chamberlain, who chairs the state Senate Taxes Committee, said he expects to have bipartisan sponsorship on a bill that seeks to permit sports wagering. He believes it could pass by the end of the 2019 session, which opens on January 8. “We have a rough draft, we’ll get it in and then we’ll make the tweaks as we go,” he said. “I think there’s popular support for it. Admittedly, this is not the top of the list for priorities, but it is certainly something that can get done.”
Legislators only need to look at the flourishing market in New Jersey to see just how lucrative sports wagering can be. The Garden State takes a 9.75% tax on retail sports betting revenue and a 13% cut on online sports wagering win. Pennsylvania takes a massive 36% tax, which could be a stumbling block as its industry seeks to keep up with the pace set by New Jersey. But even Pennsylvania’s revenue is smaller, the state will make a killing due to the high tax it takes and the $10 million up front licensing fee it charges. The likes of Minnesota are keen to get involved and we should see many more states rolling out regulated sportsbooks throughout 2019.
Kristian heads up the content and SEO team at Digital Fuel having worked in digital marketing for ten years. He’s as passionate about creative content as he is about Brighton & Hove Albion FC and when he’s not following football he’s writing about Brighton’s bustling pub scene