When New York launched mobile betting back in January, a lot of analysts and experts expected New Jersey to see a pretty significant decline. But the evidence suggests that New Jersey continues to hold its own, with its sportsbooks breaking the $1 billion mark in six handles over the last seven months. To date, that is something no other state has done. “The New Jersey sports betting market, right now, is incredibly healthy, and it’s still one of the largest in the United States,” said David Danzis, analyst for PlayNJ.com. “There was concern this might lead to declines for New Jersey because New York bettors would no longer have to cross state lines to place a bet on their phones,” said Jane Bokunewicz, faculty director of the Lloyd D. Levenson Institute of Gaming, Hospitality, and Tourism (LIGHT) at the Stockton University School of Business. “Early results do not suggest this has had a significant impact on sports betting handle in New Jersey.”
Added Danzis: “For all intents and purposes, New Jersey’s sports betting market is absolutely still top of the class and one to be looked at and replicated for other states that are seeking to do the same thing.” He attributes that trend to the ample number of operators, the work of regulators to educate consumers and the state’s early embrace of the business, which allowed a head start to score loyalty with players.
Gov. Phil Murphy signed the sports betting law in 2018, following a years-long fight undertaken by former Gov. Chris Christie, and a landmark ruling from the U.S. Supreme Court giving all states the green light to legalize sports betting.
“I think New Jersey did a lot of things right early, which really allowed it to establish the market that we see today,” Danzis said.
The numbers show that the popularity of mobile betting was accelerated by the pandemic, as people confined to their homes searched for new forms of entertainment. “In 2019, mobile betting represented 88% of total sports betting revenue,” Bokunewicz said. “In 2020, the percentage of mobile sports betting increased to 97% of the total.”
While the rise of mobile betting is a welcome development and has not yet led to a major impact on performance at brick-and-mortar locations, it is still imperative for retail and online to continue to act in a symbiotic or complimentary relationship. Danzis said the trends that emerged from the pandemic show that mobile sports betting and online gambling are going to be a real focus of the gaming industry in New Jersey moving forward.
“Atlantic City casinos, they’re going to have to figure out a way to, not necessarily get customers away from their cell phones or their tablets or their computers and get them to the properties. But figure out a way to merge the two,” Danzis explained.
That can come in the way of comps, special events, promotions, and other perks to draw players to the physical locations.
“During live iconic events like the Super Bowl and March Madness, in-person sports books provide an exciting experience for people to place wagers, while watching the games and enjoying food and beverage options in a festive atmosphere,” Bokunewicz said. “Operators can offer incentives like earning loyalty points from online wagers that may be redeemed on-site for hotel rooms, food and beverage, or entertainment to encourage mobile bettors to visit the property.
While much of that part of the equation continues to shake out post-pandemic, Danzis cited efforts by Caesars, MGM, Bally’s and Hard Rock to try and set the industry standard. He also noted that big national brands with multiple locations, especially in Las Vegas, have a real advantage in this aspect of the market, which is something he is watching closely. “That’s really the storyline in New Jersey for the next three, five, 10 years,” Danzis said.
So, who is getting the lion’s share of the action from these record-breaking handles? That is a bit of a trickier question and an area of frustration for analysts and experts because New Jersey does not provide an operator-by-operator breakdown. The numbers are reported by licensee, which clouds the picture a bit. But based on the raw numbers, the top six operators are FanDuel, DraftKings, BET MGM, Caesars, PointsBet and Barstool. That group is believed to account for more than 70% percent of the market, with a slew of other operators working at the margins. Overall, the market is considered very competitive.
March Madness drove the most recent banner month, as sportsbooks accepted $1.1 billion in bets, up 30.7% from March 2021 and up 13.7% from February. And those March numbers could have been even higher had New Jersey players been able to bet on the Elite Eight run of Saint Peter’s. New Jersey is one of a handful of states with a ban on wagering on in-state college teams or events. In fact, voters had the opportunity to change that in November, but shot down the ballot question 57% to 43%.
Since New Jersey started sports betting in 2018, the state has taken in a staggering $25.6 billion in wagers. But, because of the nature of the business and the associated costs, sports betting represents only about 7% of total gaming revenue throughout the state.
“Sports betting handle in New Jersey has consistently averaged more than $1 billion per month since September 2021,” Bokunewicz said. “Sports betting revenue is volatile, however, and fluctuates based on the outcome of the matches and the odds set by the sportsbooks. Sports betting revenue in New Jersey for the first three months of 2022 is under the first three months of 2021, but the handle, a more consistent measure, has remained strong and is up over 2021.”
And while this is the time of year where handles dip a bit, Danzis points out that NBA playoffs typically hold people’s interest through June, helping to bridge the gap until football season.
“July is going to be slog for sportsbooks. August, you’ll start seeing the numbers tick up again because of future bets on football,” Danzis said. “And then by September, I think we’ll be right back to around the numbers we’re showing now.”
It has been an extraordinary journey from the drawn-out legal fight to the Supreme Court decision to the signing of the state law to the first day of legal sports betting on June 14, 2018, when Murphy, at Monmouth Park, placed a $20 wager on the Devils to win the Stanley Cup, as well as $20 on Germany to win the World Cup.
“There’s an old adage that you bet with your head and not with your heart,” Murphy said that first day at Monmouth Park. “So, for the past seven years, our heads and hearts were in alignment as we fought to overturn an unlawful and unfair federal law. We knew in our heads we were right, and we knew in our hearts we would win. And we have.”
In fact, the state has been the standard-bearer since the infancy of the now-booming industry.
“New Jersey was a leader in legalizing sports betting and internet gaming,” Bokunewicz said. “New Jersey’s sports betting regulation has become a model for the industry.”