Sportsbook provider Kambi confirmed its partnership with Pennsylvania’s Parx Casino earlier this week. But Kambi and owner Greenwood Gaming included a provision to extend the deal if Parx decides to expand into New Jersey.
While nothing is for certain, a move from Parx would follow SugarHouse Casino’s path into the Garden State. What is certain, however, are the reasons that Parx wants to get into the New Jersey market.
The draw of NJ online sports betting
First and foremost is the revenue potential. In September 2018, bettors wagered $184 million in New Jersey sportsbooks.
While this figure pales in comparison to Nevada‘s $571 million handle during the same period, there are some whispers that New Jersey might surpass the Silver State in terms of market size. New Jersey is a more populous state, for one thing, and is in close proximity to New York City and Philadelphia.
New Jersey also has online sports betting, which negates the need for out-of-state visitors to travel all the way to Atlantic City casinos in order to bet. Unsurprisingly, mobile wagering has quickly surpassed land-based sports betting in the state.
New Jersey also offers a more favorable regulatory environment than Pennsylvania. Both its licensing fees and tax rate for sports betting are much lower than Pennsylvania’s, and the regulatory environment seems a bit more favorable to the new industry.
So, there might be several Pennsylvania casinos considering an eastern expansion. We took our best guess at which ones are most likely to make a move.
PA casinos that might be looking at NJ online gambling
Valley Forge Casino Resort
One casino that may look eastward is the Valley Forge Casino Resort. The key to this assumption is through Valley Forge’s ownership.
Boyd Gaming owns and operates Valley Forge. Boyd has numerous properties and partnerships, but the most relevant is its deal with MGM Resorts International.
Since late July, the two companies have enjoyed a partnership that grants each company territorial access. In other words, MGM can place properties in states where Boyd is, and vice versa.
MGM, in turn, owns and operates Borgata in Atlantic City. A move onto the Borgata online gambling license would make quite a bit of sense for Boyd, especially since Boyd was a minority owner of Borgata until 2016.
MGM also has numerous partnerships with various sports leagues and entities in New Jersey. Therefore, Boyd could easily find a home if it wanted one.
Mohegan Sun Pocono
Another Pennsylvania casino that could make a move into New Jersey would be Mohegan Sun Pocono. Actually, in a manner of speaking, Mohegan is already in New Jersey.
The Mohegan Tribal Gaming Authority has operated (though not owned) Resorts in AC since 2012. Under that casino’s license, the tribe launched Mohegan Sun online casino, one of the many NJ online casinos.
A transition for the Pocono location eastward would be quite easy. However, it would also be rather redundant.
The online sportsbooks already operating under its banner are, collectively, the overwhelming market leader. Based on NJ sports betting revenue, the books (mainly DraftKings Sportsbook) hold two-thirds of the entire online NJ sports betting market. The other slice is BetStars NJ.
It is hard to imagine that another entrant onto the Resorts license would incrementally add many more dividends. However, since it is unlikely that sports betting has peaked, there may be room for expansion.
Hollywood Casino at Penn National Race Course
The final option for a New Jersey expansion might be Hollywood Casino at Penn National Race Course. Casino giant Penn National owns both this property and the Meadows Casino in Pennsylvania, but Hollywood is its preferred brand of the two.
Penn National may be interested in a Garden State expansion simply as a natural progression of its business. The company has been quite growth-minded in the past year, buying rival Pinnacle Entertainment and substantially increasing its holdings.
Penn National is also focused on a sports betting expansion. The company’s Hollywood Casino Charles Town opened the first sportsbook in West Virginia at the end of August 2018.
Whether Penn would leverage its William Hill relationship in that manner is unclear. However, due to the sheer size of the company, it cannot escape notice as a potential New Jersey operator.