High 5: Breaking Down NJ Sports Betting As The Industry Hits Milestone Anniversary

Written By David Danzis on August 1, 2023
new jersey devils fans celebrate jack hughes goal

On Aug. 1, 2018, DraftKings Sportsbook became the first licensed online sportsbook in New Jersey.

New Jersey, whose US Supreme Court victory is the reason every state not named Nevada can offer any form of legal sports gambling, is where the country’s online betting boom began.

Between 2018 and 2022, NJ sports betting was the largest domestic legal sports gambling market, both in terms of real dollars and number of operators.

What was once a pipe dream – one that quickly turned into a yearslong legal nightmare against professional sports leagues – eventually came to fruition. Since that early August day five years ago, online sportsbooks in New Jersey have been at the forefront of a legal gambling industry that has generated nearly $40 billion in accepted bets, almost $3 billion in gross gaming revenue and over $350 million in state tax revenue.

That’s how you celebrate turning five.

How much legal betting has changed in five short years

A lot has changed in five years. Now, 24 states and Washington D.C. have legal online sports betting. Land-based sports betting is permitted in 33 states and D.C., with three more states in various stages of legalization.

Some things haven’t changed much. Two of the most populous states, California and Texas, have yet to launch any form of sports betting. Meanwhile, Florida is doing Florida things and may — or may not — have legal sports wagering sometime soon.

But, New Jersey was the catalyst for a national sports gambling industry that reported more than $7.5 billion in revenue in 2022 on over $93 billion in legal bets.

And, unlike other states, NJ embraced internet and digital gambling early on. The success of the state’s market is directly related to the growth of online sports betting.

2018: The jumping-off point for NJ sports betting

Looking back, it’s easy to see how 2018 was a landmark year for online sports betting in NJ. By the end of the year, NJ sportsbooks had collectively reported a shade over $94 million in NJ sports betting revenue. In just five months, eight online sportsbooks collected $53.6 million of that total.

NJ bettors shelled out $1.25 billion on sports that first year. Online sportsbooks in NJ accounted for $780 million, or 62.6%, of the handle (total amount wagered) in 2018.

A handful of new NJ online sportsbooks entered the landscape in 2019. By year’s end, the total number of digital operators had jumped to 17.

Unsurprisingly, revenue and handle also went up significantly in 2019. Online sports betting revenue was $244.3 million that year, nearly 81.6% of the statewide total that includes brick-and-mortar casino sportsbooks and racetrack books. Handle increased to $4.58 billion, with NJ online sportsbooks accounting for $3.84 billion (83.7%) of that total.

Online sports betting in NJ helped keep Atlantic City afloat in 2020

The 2020 pandemic was a pivotal moment for the gambling industry as a whole. It highlighted the fragility of land-based-only operations and the benefits of having a digital platform.

Sports betting in NJ did not suffer at all during COVID-19 and the ensuing business restrictions in 2020. By the end of the year, all nine Atlantic City casinos had retail sportsbooks and three racetracks throughout the state were licensed to offer sports bets. There were 20 online sportsbooks in NJ at the end of 2020.

Statewide sports betting revenue increased 33.1% in 2020, with operators reporting over $398.5 million. Revenue from online sports betting stood at $360.0 million, up 47.3% versus the prior year.

Of the $6 billion legally wagered in NJ, $5.53 billion, or 92%, was done via an online or mobile sportsbook.

The year that could have been

The next year, NJ dominated the legal sports betting industry nationwide. Statewide handle hit $10.94 billion, with online books accounting for $9.95 billion (91%).

Revenue also increased year-over-year in 2021. The 104.7% YoY increase suggests 2020 could have been an even better-performing year if not for the pandemic.

Nonetheless, NJ sportsbooks generated $815.8 million in revenue in 2021. The 21 online sportsbooks in NJ were responsible for approximately 91%, or $740.5 million, of the annual total.

Launch of NY sports betting takes its toll on New Jersey

Last year was a bit sobering for the NJ sports betting industry. The financial impact of New York launching online sports betting on Jan. 8, 2022, can be seen in NJ’s annual data.

Year-over-year sports betting revenue declined for both retail and online sportsbooks. Statewide, the $763 million in annual revenue was a 6.5% decline from 2021. Online sports betting revenue was $721.6 million, down 2.6% versus the previous year. Sportsbooks at Atlantic City casinos and racetracks reported a sharper decline (45.2%).

A total of 23 online sportsbooks graced landscape last year, as handle remained comparable between 2021 and 2022. The public bet over $10.94 billion in 2022, with more than $10.14 billion gambled online. That is a land-based/online split of 7.3% to 92.7%.

Five years in, New Jersey sports betting still thriving

So far in 2023, NJ sportsbooks have handled $5.16 billion and reported more than $400.8 million in revenue. In the first half of 2022, the handle was $5.78 billion while the books reported $308.7 million in revenue. The number of digital sportsbooks in New Jersey has fallen to 21.

Yet the industry continues to find ways to grow and set the national pace.

Obviously with a bit of a head start, New Jersey has accepted more money in legal bets than any other state not named Nevada. Annual handle has increased each year, although 2023 totals are a tad behind the pace set in 2022.

Five years down. Nearly $40 billion in handle. Just shy of $3 billion in gross gaming revenue. More important, over $350 million in state tax revenue, which goes toward the Casino Revenue Fund and tourism and marketing programs for Atlantic City as well as toward counties that host sportsbooks at racetracks.

Just how big can NJ sports betting get? Let’s find out.

Photo by May Altaffer / AP Photo
David Danzis Avatar
Written by
David Danzis

David Danzis is the lead writer for PlayNJ. He is a New Jersey native and honors graduate of Rutgers University. As a newspaper reporter for the New Jersey Herald and Press of Atlantic City, David earned statewide awards for his coverage of politics, government, education, sports, and business. Today, he is PlayNJ’s Atlantic City “insider” and gaming industry expert on casinos, sports betting, and online gambling. David lives in Atlantic County, NJ with his wife and two children.

View all posts by David Danzis
Privacy Policy