But thanks to the state treasurer, we have at least a guess at how much money it is going to make for both casinos and tracks, as well as the state.
The state treasurer on NJ sports betting
State Treasurer Elizabeth Maher Muoio appeared before the Assembly Budget Committee on Monday to present revised revenue estimates for both the current and upcoming fiscal years.
Among those estimates was this nugget about sports betting in the state, which became a reality last week when the state won its Supreme Court case against the federal ban:
Finally, for FY19 we have added an estimate of $13.0 million for the projected impact of sports betting. While legislation is still pending, credible market observers and our tax analysts expect this emerging gaming market to provide as much as $124.0 million in taxable earnings. Based on tax rates varying between 8 and 15 percent, sports betting is projected to yield about $13 million in revenue for the State.
Whole thing here.
Maher Muoio also said that without changes proposed in her testimony, the state would be on a “trajectory for a General Fund deficit of $2.4 billion.”
Not a lot of money?
For all the hooplah over sports betting in the US, some are likely to be disappointed in the figures from the treasurer of $124 million in gross gaming revenue and $13 million in tax revenue.
But keep in mind:
- This is the first year, not a mature market, and estimates are likely to be conservative.
- A more mature market in Nevada — with a smaller population — generates about $250 million annually.
- Ridiculous estimates like we have seen from the New York Post have no basis in reality.
- The benefits of sports betting are not just in direct revenue, but also in increased traffic for land-based facilities and as a marketing opportunity to attract new customers.
And, in the end, this is just an estimate, with a lot of variables in play.
The state makes its money back in year one?
The good news? The legal fees that the state racked up will be nullified in Year One of legal sports wagering.
At one point, the state had paid an estimated $8.6 million fighting the NCAA and four pro sports leagues in two different cases at the federal level, culminating in last week’s decision favoring New Jersey.
So, while the number is going to instantly balance the state’s budget, it’s better than the zero dollars that the state’s casinos and government coffers were getting with no legal sports wagering.