New Jersey’s budding sports wagering market should surpass Nevada’s once monopolistic grip on the sports gambling world by 2021, according a gaming research firm.
Chris Grove, managing director of sports and emerging markets for Eilers & Krejcik Gaming, said New Jersey could knock Nevada out of the top spot a year earlier if New York’s efforts to legalize sports betting stall or become derailed.
In the report, which looks at the growth in the U.S. sports betting market since the Supreme Court’s June ruling that all states can legalize and regulate sports gambling, Grove said online sports books could boost the New Jersey market. He predicted the state – which has a healthy Internet casino business – may have 20 online sports wagering sites by the end of the year
In an email interview, Grove said the prediction wasn’t meant to signal a failure on Nevada’s sport betting market.
“New Jersey is almost five times bigger by population and remains a significant tourist destination, despite Atlantic City’s struggles,” Grove said. “Our numbers also call for a significant amount of growth in Nevada’s sports betting market.”
New Jersey will also benefit from stagnation by its direct competition.
New York, which has 27 casinos – a combination of racetrack, commercial and Indian properties – recently saw its sports betting legalization efforts stall in the Legislature. Grove said the state’s gaming commission could, however, issue regulations allowing the four resort casinos to open on-property sportsbooks following next week’s gubernatorial primary.
In Pennsylvania, only two of the state’s 12 casino operators have applied for a sports book license, due primarily to a 36 percent tax on sports wagering revenues.
New Jersey Gov. Phil Murphy makes the state’s first sports wager at Monmouth Park in June.
Doing it right
The Eilers Krejcik report said casinos in Atlantic City and New Jersey’s racetracks have made all the correct moves since sports betting launched in June. New Jersey’s lengthy legal challenge of the legality of the 1992 Professional and Amateur Sports Protection Act led to the court’s decision.
Grove said several New Jersey locations are building “sportsbook facilities that will draw consumers interested in the atmosphere and experience.”
In July, New Jersey sports books collected $3.83 million in revenue from sports betting, 7 percent higher than June. The revenue was based on $40.6 million in sport wagers that casinos and racetracks took during the month.
This past weekend, however, was week one of the NFL season and the second weekend of college football. Also, mobile sports betting was launched by sports book operators.
Not an overnight flip
The change in rankings will be slow. Eilers & Krejcik projected New Jersey’s revenues from sports betting will reach $35 million by the end of 2018 and jump to $221 million in 2019. The analysts expect the market to double to $442 million in gaming revenue by 2021.
Nevada’s sports betting revenues have grown by nearly 23 percent since 2013. Last year, the state’s sports books took in $4.87 billion in total wagers and collected $248.8 million in revenue on those bets, both records.
Eilers & Krejcik projected Nevada’s sports betting revenue would reach $279 million in 2018 and $410 million by 2021.
Mobile sports wagering – the ability to bet on a game outside of a traditional casino by using an application on a smart phone or tablet device – has been credited with helping to grow Nevada’s sports gambling market.
The sports book at Resorts Atlantic City.
New Jersey’s proximity to major metropolitan centers like New York City and Philadelphia, coupled with the launch of mobile sports betting, should help increase wagering totals.
Grove noted that almost 14 million people live within a one-hour drive of the Meadowlands Racetrack and Sportsbook in northern New Jersey.
“During 17 days of operations in July, the Meadowlands generated sports betting revenue of $1.35 million, more than any other New Jersey sportsbook, including those that were operational for a full 31 days,” Grove wrote.
In the report, he said “a combination of factors” will push New Jersey past Nevada, including a shift in major card-issuing bank attitudes toward processing sports betting transactions; cutting-edge products, pricing, and promotions; and taking business away from off-shore and illegal sports betting operations.
Grove said New Jersey Division of Gaming Enforcement Director David Rebuck issued stern warnings to gaming industry suppliers. The regulator told companies they could jeopardize their standing in the state by providing goods and services to both Atlantic City casinos and the illegal gaming sector.
“New Jersey regulators are refocusing their aim on offshore operators serving the U.S. market as the state’s online sports betting industry gets off the ground,” according to the report.
What about Nevada?
For now, Nevada – particularly Las Vegas – is the still the nation’s sports wagering capital. In July, the state Gaming Control Board announced that it plans to consider possible changes to Regulation 22, the law that governs sports books, as a response to competition from other states.
In Nevada, sports betting is considered an amenity to the overall casino market. In 2017, revenue from sports wagering accounted for 2.1 percent of the state’s overall $11.5 billion in gaming revenue.
Grove said Nevada should simplify its registration process for mobile sports wagering, a change that has been advocated by longtime Nevada bookmaker Vic Salerno, president of U.S. Fantasy Sports.
“The friction involved there is likely artificially depressing the performance of sports betting in Nevada,” Grove said.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter
