New Jersey Sports wagering continues to impress
New Jersey is well on the way to becoming one of the nation’s largest sports wagering marketplaces. A local observer tells us how and why
November was a very good month for New Jersey’s online and retail sportsbooks.
According to published reports, the state’s sportsbooks accepted $330.7 million in wagers, which was up 27 percent from $260.7 million in October, with online sportsbooks accounting for 72 percent of total bets in November and retail sportsbooks making up the remaining 28 percent. These results come on the heels of a then record setting October, which saw New Jersey sportsbooks generate a 42 percent increase in wagers compared to the previous month.
Since sports betting was legalized in June 2018, the Garden State’s sportsbooks have combined to generate a respectable $928 million in wagers.
Revenues for the New Jersey sportsbooks also gained new highs in November—the state’s $21.2 million in November gross revenue nearly doubled the $11.7 million October win and fell just short of the state’s high-water mark of $23.96 million in September 2018.
Despite these positive overall results, the New Jersey sports wagering market still has a way to go before it surpasses Nevada, the current top dog in U.S. sports betting, which accepted $528 million in bets in October. The market may also suffer from some headwinds going forward with the sports betting operations about to get underway in neighboring jurisdictions Pennsylvania and New York.
The good news: the online betting component of New Jersey’s nascent online sports wagering scene continues to grow in popularity, which bodes well for the future of this gaming subset, according to industry observers. “New Jersey continues its march toward becoming the nation’s largest legal sports betting market,” said Dustin Gouker, lead analyst for PlayNJ.com, a subsidiary of The PlayUSA Network, which is a leading source for research related to the regulated U.S. online gaming market. “The main driver is online sports betting, which now accounts for the vast majority of all bets in New Jersey. The state’s embrace of mobile betting has shown the path forward for any other state planning on legalizing and regulating sports betting.
Gouker recently took some time to discuss observations and lessons from the New Jersey sports wagering experience with Sports Betting Management Associate Editor Joan Mantini. What follows are some excerpts from this conversation:
What were some of the regulatory, legal and political obstacles the nascent New Jersey online and land-based sports betting industry has faced and how were they overcome?
GOUKER: New Jersey fought for years for the right to offer sports betting, challenging the federal ban on two different occasions before ultimately prevailing in the Supreme Court. Nearly everyone was on the same page about how sports betting would roll out in political terms, as evidenced by unanimous votes for the legislation that passed last year. From a regulatory standpoint, the state has also been preparing for years to have legal wagering, so the rollout has been relatively smooth from the consumer side.
It’s slightly surprising that some of the companies that have been involved in the online casino and poker industries for five years have still not [initiated sports wagering coverage]. Payments related to sports betting accounts continues to be an issue, as many major banks, credit cards and payment processors still do not facilitate legal online gambling transactions.
What guidance did the state take from the European market when it came to implementing sports wagering?
GOUKER: I am not certain of exact guidance the state might have gotten from regulators in Europe, but I know New Jersey is confident in its ability to regulate gaming, especially online wagering, which it’s done for five years.
The NFL, NHL, NBA, MLB, NCAA and other major U.S.-based sports leagues stand to profit from legalized sports betting. How do you predict sports betting in 2019 will evolve between the leagues and gaming providers in New Jersey?
GOUKER: We’ve seen major corporations like MGM and FanDuel Group (part of Paddy Power Betfair) sign deals with leagues and teams in sports gambling. More of that will certainly happen. I don’t see the state changing its laws/regulations in a way that would benefit the leagues. A new group [Sports Wagering Integrity Monitoring Association (SWIMA)] seeks to bring together stakeholders on sports betting integrity issues.
Online and land-based sports wagering in New Jersey gross revenue reached record highs in 2018, what did the operators in the state do to reach these records?
GOUKER: More operators — and the successful launch of online wagering — has led to consistent growth in the early days of New Jersey sports betting. DraftKings, in particular, has used its first mover status in the state and its brand recognition to help drive the early growth.
What is the predicted online and land-based sports wagering revenue for 2019? How big can sports wagering become in New Jersey? What growth obstacles remain to be overcome?
GOUKER: It’s hard to put an exact number on what New Jersey will do, but it seems like New Jersey could be bigger than Nevada by 2019. Nevada generates about $5 billion in wagers each year and about $250 million in revenue. Both those numbers should be reachable for New Jersey by next year, if not in the near future after that. The state is more conducive to online wagering—i.e. there is remote sign-up that doesn’t exist in Nevada—and there’s a larger permanent population. But the state also has to contend with the launch of Pennsylvania sports betting, and the possibility of New York launching sports betting in 2019 or later, both of which could impact the amount wagered within its borders. But we have seen online casinos continually grow for five years in New Jersey, and that segment of the market should continue to see growth, especially as we see more operators enter the market.
Do you think NJ will band with other states to create bigger players pools for online sports wagering and betting?
GOUKER: There are logistical issues from a legal standpoint… states would likely have to create some sort of interstate compact, and the federal Wire Act still exists that deals with interstate wagering. The short answer is that New Jersey and other states will be on their own for sports betting in the short-term.
What can other states learn from the New Jersey’s experience thus far?
GOUKER: You need to have mobile and online wagering if you are going to do sports betting. Online wagering has accounted for roughly two-thirds of all money wagered in the state. Land-based sports betting only does not compete effectively with the offshore online sportsbooks, and it limits the revenue potential for any state.
What role have online sports wagering providers/suppliers played the in the success of sports betting in the Garden State?
GOUKER: Most of the wagering has been online… and by and large they have created sports betting apps that are fun and easy to use, and that’s translated into more revenue for the state.