fbpx

Just how much money is the state making from sports betting?

Daniel J. Munoz//September 16, 2019//

Just how much money is the state making from sports betting?

Daniel J. Munoz//September 16, 2019//

Listen to this article

The sports betting market has been a boon to New Jersey’s gaming industry, especially in Atlantic City where gambling profits and tax revenue were in a long decline, a slump accelerated in the past decade by the Great Recession and the introduction of casinos in Delaware, Pennsylvania and New York.

But pinpointing the economic benefits beyond racetracks and Atlantic City casinos, poses more of a challenge.

New Jersey topped Las Vegas as the nation’s sports betting capital at least once, in May 2019. Gamblers placed $3.2 billion in wagers during the first 12 months of legal sports betting in New Jersey from June 2018 to July 2019, and the 2019 National Football League season should be another bonanza for Garden State gaming.

New Jersey has 10 in-person sportsbooks located at two racetracks and eight casinos, and nine online and mobile sportsbooks.

In all, the house took home $127.5 million on sports bets of $2.2 billion, most of it online and via mobile phone, from January to July of this year.

“Indirectly, sports wagering also generates jobs, wages and an incremental increase in demand for other goods and services provided by casino hotels such as food and beverage and entertainment,” Rummy Pandit, executive director of Stockton University’s Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism, told NJBIZ.

“It is difficult if not impossible to quantify these indirect impacts due to the limitations of publicly available data and the difficulty of isolating the sports betting variable from other variables in the market including local and regional competition/expansion,” he added.

But numbers compiled by the Casino Control Commission (CCC) and the Division of Gaming Enforcement — both of which regulate the state’s online and brick and mortar gambling and sports betting industries — showed upticks in tax revenue across the board in 2018.

The state levies a host of taxes on the casino industry and ancillary economy, which includes non-gaming taxes that extend beyond just what the casinos and racetracks take home every month.

In 2018, the non-gaming tax revenue from Atlantic City and Atlantic County totaled $154.5 million, according to the CCC’s most recent annual re-port. Non-gaming tax revenue totaled $130.7 million in 2016 and $123.7 million in 2017.

CCC Chair James Plousis said the bump in 2018 was due in part to the opening of two new properties in Atlantic City, the Hard Rock Casino Hotel and the Ocean Resort Casino.

Still, the uptick is worth celebrating, Plousis maintained, and a sizable chunk of it came from the state’s lucrative sports-betting market.

“You hear people in the industry saying that it’s driving a lot of food and beverage, as well as people staying [at hotels],” Plousis told NJBIZ. “There’s definitely a ripple effect with people coming into town for sports betting.”
Of 2018 totals, $69.2 million came from from sales and use taxes, according to the CCC. The sales tax rate is 6.625 percent of any goods or services purchased in the state, and the money goes into the state’s coffers for general use.

The luxury tax — 3 percent on alcoholic beverages and 9 percent on any other purchases, such as entertainment, room rentals, beach chairs, cabanas and admissions tickets within Atlantic City — generated $37.2 million.
After that, the region generated $23.34 million from casino parking fees, which are $3 a day per occupied casino parking space — $2.50 of which goes to the Casino Reinvestment Development Authority and 50 cents to a fund for disabled and senior citizens.

Another $11.7 million of state revenue came from the casino hotel room fee; the state’s tourism promotion fee — $2 per occupied casino hotel room and $1 per occupied motel and non-casino hotel — produced $8.6 million.
Funds from the tourism fee go toward the city’s convention center to promote tourism and the local economy. The region also generated $5.4 mil-lion from the state occupancy fee, which is 1 percent for Atlantic City.

Gambling tax revenue, which went up across the board, has gone up in Atlantic City during 2018, according to an August 2019 report from the DGE. The state’s 8 percent gross revenue tax on casino income produced $174.7 million in 2017 and $181.2 million in 2018. The 15 percent internet gross revenue tax for the state was $36.9 million in 2017 and $44.8 million in 2018.

In 2018, the state directly made almost $11.6 million of tax revenue from sports betting: $3.4 million from the 8.5 percent retail sports tax, $6.9 mil-lion from the 13 percent internet sports tax levy, $627,000 from the state’s 1.25 percent additional tax on sports wagering and another $550,000 from the state’s 1.25 percent racetrack economic development tax.

“The overall tax rate is very small on the overall handle on sportsbooks,” Plousis said. “The activities that go around, people coming down here, some people staying overnight, everybody’s dining and eating.”