Online gambling was launched in New Jersey in 2013, and has since enjoyed tremendous success and growth over the past eight years. In 2018, the industry was taken to the next level with the legalization of sports betting, which has vaulted the Garden State to the top of the food chain when it comes to online gaming as a whole.
Since June of 2018, no state has had a higher handle (amount of money wagered) or more revenue from sports betting than New Jersey, according to Legal Sports Report.
In fact, New Jersey handled a total $1.01 billion in sports betting in September, becoming the first state in the US to surpass the $1 billion mark and breaking the previous record it had set itself in December last year.
Lou Monaco, industry analyst at Gambling.com Group, says that the NFL and college football are the biggest drivers for the record-setting figures that the state has seen each fall, numbers that could continue to impress as the NHL, NBA and college basketball get into full swing.
Of the $1.01 billion wagered in September, 90.8% came through online sportsbooks, with Meadowlands/FanDuel/PointsBet/SuperBook leading the online market with $36.6 million in gross revenue, up from $23.6 million in August.
“Sportsbooks reaching $1 billion in monthly handle is a reminder that there is no gaming market in the US that is playing on New Jersey’s level,” says Eric Ramsey, an analyst for the PlayUSA.com Network. “The relentless growth in online sports betting and casino gaming continues to lift the entire industry.”
And it’s not just sports betting, as online casinos and poker rooms produced a record $122.6 million in gross gaming revenue in September as well. For the year, online casinos and poker rooms have generated $988.7 million, surpassing the previous record of $970.4 million in annual revenue set in all of 2020.
With online casino’s consistent revenue, and sports betting’s annual record-setting fall surge, online gaming remains strong in New Jersey. However, the industry is evolving, and there are a few factors to consider that could have an impact on the industry here in the state.
Regional Expansion of Online Betting
For the past three years, New Jersey has capitalized on the fact that surrounding states were either slow to adopt legal sports betting or did not yet launch legal online sports books.
Monaco says that many individuals from neighboring states, particularly New York, who wanted to place bets, have been coming to New Jersey to do so, which has been a boon for the Garden State’s industry.
However, this regional monopoly of sorts is changing, as more states move to legalize online sports betting. Connecticut launched online casino gambling and online sports betting in October, and saw more than 1.2 million transactions take place in the first week, propelling the state to No. 9 in overall online sports betting and traffic, according to GeoComply Solutions Inc.
“The sports betting industry is providing other states with the opportunity to take advantage and get into the game,” Monaco says.
He adds that New Jersey, however, has done a tremendous job as far as marketing and attracting companies to the state to launch their products, which has cemented the state as an industry leader.
“You have the big players like FanDuel and DraftKings, but you also have small players coming into the market,” he adds. “There are so many products now.”
For example, Australian-based online gaming company PlayUp recently announced a partnership with the New Jersey Devils, and even launched the PlayUp Sports Lounge within the Prudential Center, which was unveiled at the Devils home opener this year.
The big question is the looming legalization of online sports betting in New York. At press time, New York is on the verge of naming at least two operators to begin offering online sports betting, according to the New York Post. Monaco adds that the state is targeting a launch sometime before the 2022 Super Bowl in February.
“It should be very interesting to see entering next year, especially with New York coming on board, how New Jersey maintains what it has already built and established,” Monaco says.
Sports Betting on State College Athletics Amendment
New Jersey’s gubernatorial election in November included a ballot question which asked voters if they supported a constitutional amendment to allow wagering on college sport competitions in New Jersey.
The potential amendment was defeated when a majority of voters chose to prohibit wagering on college sport competitions held in New Jersey or involving a New Jersey-based college team.
The failed passing of the amendment has implications on future sports betting in the state, particularly in 2025, when the Prudential Center is set to host NCAA Tournament games. Barring a change between now and then, New Jersey bettors will not be allowed to wager on those games.
“I don’t see how they can go back and rework it,” Monaco says.
The American Gaming Association projects Americans wager as much as $8.5 billion on the NCAA Tournament annually, which means that legal New Jersey sportsbooks stand to potentially lose millions of dollars in handle during the tournament in 2025.
Monaco adds that any future NCAA competition that takes place in the state will continue to not be able to be wagered on, despite the fact that New Jersey does allow people to wager on college athletic events held outside the Garden State.
Conclusion
Despite the ban on in-state college betting and more states moving to legalize online gaming and betting, the industry forecasts it will remain strong in New Jersey, as the global industry is poised to continue exponential growth.
According to a report from ResearchAndMarkets, the global online gambling market is expected to grow from $64.13 billion in 2020 to $72.02 billion in 2021 at a compound annual growth rate (CAGR) of 12.3%. The market is expected to reach $112.09 billion in 2025 at a CAGR of 12%.
“A lot of these companies, although they have international headquarters, have established a home base in New Jersey as well,” Monaco says, citing BetMGM in Jersey City and DraftKings in Hoboken. “These companies are generating jobs and contributing to the state economy as well.”
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