When New York rolled out mobile betting in January, many analysts and pundits expected New Jersey to see a pretty significant drop. But the evidence suggests New Jersey is still holding its own, as its sportsbook has surpassed $1 billion in six holds in the last seven months. No other state has done this before. “The New Jersey sports betting market is incredibly healthy right now and remains one of the largest in the United States,” said David Danzis, analyst at PlayNJ.com. “There was concern that this could result in cancellations for New Jersey, as New York bettors would no longer need to cross state lines to place a bet on their mobile phone,” said Jane Bokunewicz, Faculty Director of the Lloyd D. Levenson Institute of Gaming. Hospitality and Tourism (LIGHT) at Stockton University School of Business. “Initial results do not indicate that this had a significant impact on sports betting operations in New Jersey.”
Danzis added, “By any measure, New Jersey’s sports betting market is still absolutely front runner and one that needs to be looked at and emulated for other states aspiring to do the same.” He attributes this trend to the large number of operators that work of regulators to educate consumers and the early state takeover of the business, which allowed it to gain a head start in winning player loyalty.
Governor Phil Murphy signed the Sports Betting Act into law in 2018 after a years-long battle by former Governor Chris Christie and a landmark US Supreme Court ruling that gave all states the green light to legalize sports betting.
“I think New Jersey got a lot of things right early on that really made it possible to establish the market that we’re seeing today,” Danzis said.
Figures show that the popularity of mobile betting has been accelerated by the pandemic, as people tied to their homes sought new forms of entertainment. “In 2019, mobile betting accounted for 88% of total sports betting revenue,” said Bokunewicz. “In 2020, the share of mobile sports betting rose to 97% of the total.”
While the rise of mobile betting is a welcome development and has not yet resulted in a major impact on brick-and-mortar performance, it is nonetheless imperative that retail and online continue to operate in a symbiotic or complementary relationship. Danzis said the trends emerging from the pandemic showed mobile sports betting and online gambling will be a real focus of New Jersey’s future gaming industry.
“Atlantic City casinos need to find a way to not necessarily lure customers away from their phones, tablets or computers and get them to the properties. But find a way to bring the two together,” Danzis explained.
This can come in the form of comps, special events, promotions, and other perks to lure players to the physical locations.
“During legendary live events like the Super Bowl and March Madness, in-person sportsbooks provide an exciting experience for people to place bets while watching the games and enjoying food and drink in a festive atmosphere,” said Bokunewicz. “Operators can offer incentives such as earning loyalty points through online betting that can be redeemed on-site for hotel rooms, food and beverage or entertainment to encourage mobile bettors to visit the facility.
While much of this part of the equation continues to shake up post-pandemic, Danzis cited efforts by Caesars, MGM, Bally’s and Hard Rock to try to set the industry standard. He also noted that large national brands with multiple locations, particularly in Las Vegas, have a real advantage in this aspect of the market, which he is closely monitoring. “That’s really the story in New Jersey for the next three, five, 10 years,” Danzis said.
So who gets the lion’s share of the action from these record-breaking holds? That’s a slightly trickier question and an area of frustration for analysts and pundits since New Jersey doesn’t provide a breakdown by operator. The numbers are reported by the licensee, which clouds the picture a bit. But based on the raw numbers, the top 6 operators are FanDuel, DraftKings, BET MGM, Caesars, PointsBet and Barstool. This group is believed to account for more than 70% of the market, while a number of other operators operate on the fringes. Overall, the market is considered very competitive.
March Madness powered the most recent banner month as sportsbooks accepted $1.1 billion worth of bets, up 30.7% from March 2021 and up 13.7% from February. And those March numbers could have been even higher if New Jersey players could bet on Saint Peter’s Elite Eight run. New Jersey remains the only state with a collegiate team betting ban in the state. In fact, in November, voters had an opportunity to change that, but shot the poll down 57% to 43%.
Since New Jersey started sports betting in 2018, the state has taken in a whopping $25.6 billion in betting. However, due to the nature of the business and the costs involved, sports betting accounts for only about 7% of total gaming revenue in the entire state.
“As of September 2021, New Jersey sports betting revenue has averaged more than $1 billion per month,” Bokunewicz said. “However, sports betting revenue is volatile and fluctuates depending on the outcome of matches and the odds set by sportsbooks. New Jersey sports betting revenue for the first three months of 2022 is down from the first three months of 2021, but the handle, a more consistent measure, has remained strong and is increasing compared to 2021.”
And while this is the time of year when the holds are easing a little, Danzis points out that the NBA playoffs usually keep people interested through June and help close the gap until football season.
“July will be a hard hit for sports betting. August, the numbers will increase again due to future football bets,” said Danzis. “And then, I think by September we’ll be back around the numbers that we’re showing now.”
It’s been an extraordinary journey from the protracted legal battle over the Supreme Court’s decision to sign the state into law to the first day of legal sports betting on June 14, 2018, when Murphy placed a $20 bet at Monmouth Park on the Devils, the Stanley Cup and $20 on Germany to win the World Cup.
“There’s an old saying that you bet with your head not your heart,” said Murphy that first day at Monmouth Park. “So our minds and hearts have been in sync for the past seven years as we have fought to repeal an unlawful and unfair federal law. We knew in our heads we were right and we knew in our hearts we were going to win. And we have.”
In fact, the state has been the standard-bearer since the booming industry began.
“New Jersey has been a leader in legalizing sports betting and internet gaming,” said Bokunewicz. “New Jersey sports betting regulation has become a model for the industry.”