The headline-grabbing news of New Jersey sportsbooks eclipsing the $1 billion handle milestone in September may have come as a surprise to some. For those in New Jersey sports betting circles, it was inevitable.
“The numbers have been trending in this direction for quite some time,” said Tom Gable, director of race and sports at Borgata Casino Hotel & Spa in Atlantic City. “I figured the state would hit it at some time in 2021. I was thinking the most likely time would have been October when all four major sports were going at the same time, but it came one month earlier than I anticipated with the return of football being the catalyst.”
New Jersey’s 22 online sportsbooks and 12 retail shops took over $1.011 billion in legal bets last month and reported an all-time high of $82.44 million in revenue.
Only a matter of time
NJ gamblers have an affinity for betting on football, specifically.
Between November 2020 and January 2021, NJ sportsbooks reported a monthly handle of at least $930 million. December 2020’s $996.3 million was the largest monthly handle in U.S. sports betting history.
Until last month.
“New Jersey has been sniffing around that mark for a while and, at times, they just came up short,” said Johnny Avello, the director of race and sportsbook operations for DraftKings. “We knew it would be during the football season that (N.J.) would do it.”
‘Huge appetite’ for New Jersey sports betting
More than $400.8 million was bet on football in September, according to the state’s figures.
Gable said Borgata’s sportsbook had a record month, besting the previous monthly high in handle by 36%.
“You don’t always want to generalize to the rest of the state what you’re seeing at one property, but the huge increase I had seen gave me some confidence to make the prediction,” he said. “I think it just shows the huge appetite people have to wager on sports.”
N.J. sports bettors to Nevada: ‘Get out of the left lane!’
The Garden State has been a sportsbook operator’s dream since sports betting went live in 2018. In revenue and handle (the amount of money wagered), NJ has surpassed every other US gaming jurisdiction that offers legal sports wagering, including Nevada.
More than $19 billion has been legally wagered on sports in NJ between June 2018 and now. Nevada sportsbooks have taken $16.8 billion in bets over the same time. (Nevada has yet to release September gaming figures).
Year-to-date, more than $7.1 billion has been legally wagered on sports in NJ, exceeding the $6 billion wagered for all of 2020. Nevada previously held the annual high at $5.3 billion in 2019.
New Jersey sportsbooks have reported $1.35 billion in revenue dating back to 2018, compared to a little more than $1 billion for Nevada’s operators.
What is driving New Jersey sports betting numbers?
Yaniv Sherman, senior vice president and head of U.S. at 888 Holdings (which includes 888 Sportsbook), said NJ has several factors working in its favor.
The low tax rate (8.5% retail, 13% internet) spurs competition. A strong regulatory structure for both online and retail promotes consumer confidence. Plus, NJ’s population is relatively well-off financially and full of avid sports fans.
“N.J. is still the front runner in creating a well-balanced gaming ecosystem,” Sherman told PlayNJ. “The proximity to New York City and the fact legal sports betting is still unavailable in N.Y. is naturally a catalyst, but New Jersey’s addressable market is a sound one on its own.”
Online and mobile sportsbooks are ‘the way to go’
The success of New Jersey sports betting is unquestionably due to online and mobile apps. According to data from the state Division of Gaming Enforcement, more than 90% of all the money ever wagered on sports in N.J. has been done digitally.
Last month, more than $918 million was wagered online.
The Meadowlands Racetrack reports the state’s highest monthly sports betting revenue each month because of online partners FanDuel Sportsbook, PointsBet, and SuperBook. Last month, those online operators accounted for 44% ($36.6 million) of the statewide total ($82.4 million).
DraftKings Sportsbook was the first online operator in NJ. The mobile app went live in August 2018.
“New Jersey did it right from the very beginning, especially with the mobile aspect,” Avello said. “If you want handle, revenue, and long-term action, mobile is the way you have to go.”
NJ can ‘certainly’ top $1 billion again, but it won’t be easy
So, will NJ be able to replicate September’s results?
“I think it’s certainly achievable again,” Gable said. “There is still a lot of free money and [bonuses] out there online, and I don’t really see the marketing spend drying up right now. All of the apps are still in this big customer acquisition mode, and that means plenty of bonuses and free money, which certainly contributes to the handle numbers.”
The king of betting sports may also influence future numbers. The NFL just kicked off a $6.2 million responsible gambling campaign.
“The other factor that might curtail growth is responsible gaming measures the leagues and regulators may introduce, but those will help solidify the regulated market in the longer run,” Sherman said.
Then, of course, there’s the elephant in the room: New York online sports betting.
While exact figures are not public, NJ operators say roughly 20-25% of all mobile action is out-of-state residents.
“Obviously, the one big thing that would affect N.J. hitting this mark again is going to be when New York finally gets their mobile betting up and running,” Gable said. “It’s no secret that a lot of the N.J. online numbers come from N.Y. residents driving over a bridge to place wagers and then driving back home.
But, just how much of an impact it will have on New Jersey sports betting is uncertain.
“You will see the mobile numbers take a hit when N.Y. finally comes online,” Gable added. “I don’t think you will see much effect on the retail numbers at all, but it’s going to decrease the monthly state handle for sure.”
AP Photo/Wayne Parry
