The launch of legal sports betting has proven to be a game changer for the state of New Jersey.
The Monmouth Park Racetrack and Borgata Hotel Casino & Spa both opened retail sportsbooks one year ago, on June 14, 2018, and nothing has been the same since.
Over the past year, the number of retail sportsbooks quickly grew to 10. Many of the temporary sportsbooks opened in 2018 have been replaced by permanent operations.
Plus, sports betting in NJ has moved increasingly online.
DraftKings Sportsbook was the first online and mobile sportsbook to launch in NJ when it went live on Aug. 6, 2018. There are now no less than 14 NJ sports betting websites and mobile apps. Plus, at least another half a dozen preparing to go live.
Additionally, online and mobile sports betting now makes up more than 80 percent of the NJ market. A market that didn’t exist 366 days ago, but has since seen more than $2.9 billion in bets placed through May 2019 and generated better than $194 million in revenue.
Certainly, a lot has changed over the past 12 months.
However, none of the changes have been more significant than this list of the top five things that have changed in NJ since the advent of legal sports betting:
1. Business is booming in AC
Sports betting hasn’t exactly turned Atlantic City back into the vacation destination it once was.
However, the revenue numbers prove people are heading to America’s Playground more now than they have over the past decade. Plus, legal sports betting has proven to be a big part of the reason why.
Two casinos, shuttered during the decade of declines, reopened last year. Plus, a little less than the first six months of legal sports betting in the state helped Atlantic City’s annual casino revenue rise to $2.86 billion in 2018. That represents a 7.5% increase over 2017 and the third positive year in a row for the industry.
‘Atlantic City is coming back to life’
Former NJ Senator Ray Lesniak is widely credited with starting the state’s push for legal sports betting.
This year, he told the Press of Atlantic City that together with online gambling, sports betting has become the economic engine keeping the Atlantic City casino industry running:
“(Online gambling and sports betting) keeps the lights on in these casinos. The revenues that the casinos get from (online gambling and sports betting) enable them to upgrade their facilities, make investments in their buildings, propose other entertainment attractions… Now, because of sports betting and internet gaming, Atlantic City is coming back to life.”
Of course, sports betting is at two racetracks as well.
However, combining racetrack numbers with those from casino-based and online sportsbooks, NJ’s new sports betting industry saw $1.24 billion bet through December 2018. That helped generate a little more than $94 million in revenue.
Clearly, Atlantic City casinos could not have posted that 7.5 percent revenue increase without almost $100 million worth of help from sports betting.
That should help keep all the momentum going.
2. Sports betting and online casino cross-sell
Online gambling has continued to grow in NJ and is now averaging more than $30 million a month in revenue.
It would be naive to think the launch of legal sports betting has had nothing to do with that continued growth. Or, that the success of NJ online sports betting hasn’t been aided by the strength of a well-established online gambling industry.
Why? Because several operators of both had the foresight to put the two together from the start. Plus, even those in only sports betting or online gambling have begun to see how successful the marriage between the two can be.
The greatest thing since legal online gambling and sports betting has been the launch of the two together in an integrated online gambling and sports betting operation.
The ability to have just one account means people who came to bet sports might also try real money online casino games and vice versa. It’s the best cross-selling opportunity these operators could have hoped for.
In fact, it’s so good that top-grossing NJ online casino site Golden Nugget launched an integrated sportsbook in February.
3. The rise of the daily fantasy sports operators
Conventional wisdom suggested casino operators with decades of experience running Las Vegas sportsbooks would lead the NJ market.
We now have definitive proof that conventional wisdom isn’t always right.
Daily fantasy sports operator DraftKings shocked the entire industry when it got its DraftKings Sportsbook mobile app to market first. It took great advantage of the nearly monthlong head start and was the NJ sports betting market leader for its first few months in operation.
DraftKings Sportsbook turned traditional sports betting on its head. It uses layman language over traditional sportsbook jargon. As a result, it is drawing more than just sharp sports bettors to the market.
DraftKings Sportsbook is still No. 2 in mobile, but the top spot in the entire industry has been taken over by another daily fantasy sports operator.
FanDuel Sportsbook at The Meadowlands quickly became the top retail sportsbook in the state thanks to its proximity to New York City. However, it has also risen to the top of the more lucrative mobile side of NJ sports betting as well.
Both organizations have spent millions marketing their DFS products on national sports broadcasts over the past few years. So much that it probably would have taken decades to see a real return on investment with the slim margins DFS provides.
So far, New Jersey sports betting has proven to be a better bet and perhaps the name recognition both DraftKings and FanDuel enjoy from the DFS days is paying dividends now.
4. Bettors crossing borders
Atlantic City casinos have depended on business coming in from larger nearby markets such as Philadelphia and New York City for decades. Therefore, it is no surprise to see NJ sports betting operators drawing business from there as well.
What is surprising is other states such as Pennsylvania and New York haven’t been faster to launch legal sports betting to mitigate the loss.
PA gave NJ a five-month head start on retail and close to a nine-month head start on mobile sports betting.
The clock is still running on the head start New York has given NJ (though there’s light at the end of that tunnel). But as a result, the Empire State is still watching millions float across the Hudson every month.
Plus, NJ sportsbooks have done more than just reap short term gains here.
Yes, they’re drawing revenue from out-of-state sports gamblers visiting NJ while they have no other options. But NJ sports betting operators are also building relationships with these out-of-state customers.
It’s the kind of relationships they hope will make some stick around even when they do have other local options.
5. New Jersey on the national stage
NJ fought the court battle that got the federal ban on sports betting thrown out. So, it was no shock to see the launch of legal sports betting in the Garden State make national headlines.
What is rather shocking is that NJ sports betting has stayed in the national spotlight.
The fact the sports betting market in NJ has proven to be 80% online has drawn national attention in and of itself. It has also forced other states interested in sports betting to rethink mobile.
Make no mistake, experience counts for something and Nevada is still the king of all US sports betting states. However, the numbers coming out of NJ after the NCAA Tournament gave the Silver State a bit of a scare.
They also made NJ sports betting a national story once again.
New Jersey’s sportsbook operators posted a record of $31.7 million in sports betting revenue off of $372.45 million in handle in March 2019.
That was still under the $34.2 million in revenue from $522 million in handle Nevada posted in March 2018. However, it was close enough the national story became a down March in Nevada would put NJ on top for the first time.
It didn’t happen. Nevada posted a new record for monthly handle at nearly $600 million. Plus, its revenue of $32.5 million just barely outran NJ’s.
Regardless, the numbers put Nevada on notice. NJ is knocking on the door and remains in the national spotlight heading into just its second year of legal sports betting.