Confident gambling administrators have for months predicted New Jersey would surpass Nevada as the sportsbook capitol of the US
And May has made them look very much like men who know what they are talking about. They say one swallow doesn’t make a summer, but it’s already happening.
NJ’s sports betting handle in May for the first time surpassed Nevada’s – by $318.9m to $317.4m. And that’s official, according to betting regulators of the two states.
The difference was only $1.5m but it had a Nevada sportsbook chief saying, “It was only a matter of time.”
He is Jay Kornegay, head of Westgate SuperBook in Las Vegas. He was being quoted by Nick Corasniti, a New Jersey journalist writing this week in the New York Times. His article was headlined “Move over Nevada: New Jersey is the sports betting capital of the country.”
In explanation Kornegay said: “States with higher population numbers will continue to surpass Nevada, and New Jersey has a population of 9m, not counting (its many betters from) surrounding states, versus Nevada’s 2.5m.”
Kornegay expects New Jersey to maintain its lead. However, it might lose some punters to neighboring Pennsylvania now that Penn also has online betting operators. The eventual entry of New York into mobile betting could also take its toll on NJ’s handle numbers.
Wire Act makes cross-border online betting illegal
Kornegay did not mention that this would not necessarily apply but for the Wire Act. It compels sportsbooks to operate only within state lines. It is currently illegal for any state to accept online bets from outside their borders.
In the case of New Jersey, this law is, in fact, a pro rather than a con. So long as New York Governor Cuomo continues to dilly, dally in allowing online wagering, New Jersey will benefit. This from the thousands of New Yorkers streaming across the Hudson into NJ to make bets with their mobile phones.
In terms of revenue, May saw New Jersey’s casinos and racetracks and its 14 online sportsbooks make $15.5m. This also compared favorably to the $11.6m made by Nevada’s sportsbooks.
In so far as betting handle for the last 12 months is concerned, however, NJ still has some catching up to do.
Since taking its first wager after betting prohibition ended in May last year, NJ has taken around $3 billion in bets. New Jersey, where betting has never been prohibited, has, at the same time, raked in $5.2 billion.
At least 80% of New Jersey’s sports bets have come in via the internet. As against this, in Nevada much larger percentages come from in-person Casino betting – especially during major sports contests. The Super Bowl is one of them. The climax of March Madness (college basketball) is another.
Some of the major states like California, Texas, and Florida have shown no urgency to implement sports betting. Nevada, then, should continue to benefit from an influx of in-person punters of these states. And this especially so in neighboring California, home of many of the nation’s greatest football, basketball and baseball teams.
Less than a dozen states have legalized sports-betting, but…
Less than a dozen of the US’s 50 odd states have introduced legal sports betting or are about to do so. However, this trickle could grow to a flood as more and more states begin to see the advantages of it.
To start with it will drastically curtail betting with illegal offshore online sportsbooks and keep at home millions of dollars. Strict regulations will also make it safer. Perhaps, though, we should let New Jersey’s wagering protagonists tell us how sports-betting is doing for its new flagship state.
“It happened a little quicker than we ever imagined,” Corasniti quotes Chris Christie, a former NJ Governor, as saying. “But I had no doubt that we would. Just based on demographics and how we structured the thing, I knew we’d do extraordinary things.”
During his Governorship, Christie played a leading role in New Jersey’s winning court battle to have sports betting unbanned. It ended with the Supreme Court declaring the PASPA law that had made it illegal for two decades being declared ‘unconstitutional’.
In just 12 months from start-up, $2.9 billion handle and nearly $200m in revenue for its Casinos, race tracks, and 14 partnering sportsbooks is certainly ‘extraordinary’.
Sports-betting has also been a life-saver for New Jersey race tracks, in the eyes of Jeffrey Gural, owner of the Meadowlands Race Track.
“I don’t know how much longer I could have kept that place open. We were losing millions of dollars a year just because I love harness racing. At some point, you pull the plug. So, it’s helped, everybody.”
Online betting is NJ’s greatest source of betting revenue
By helping increase customer flow into the Casinos of Atlantic City, sports-betting has also helped boost what had been an ailing industry. But it is online betting, by far, that has helped put more cash in the coffers of everyone connected with sports betting.
“Over the past year, New Jersey has in many ways ascended to the center of the sports betting universe. This is thanks largely to the Garden State’s embrace of mobile technology.”
The words are those of Jamie Shea, head of a sports fantasy giant and NJ sportsbook market leader DraftKings.
“We have taken in over 20 million bets via mobile and paid out over $600 million in New Jersey alone,” he was quoted as saying by Corasniti.
Nobody can be sure if New Jersey will continue to lead the US sports industry – or for how long. US Sports betting is currently in a state of flux. Many of its largest States are still some way off legalized betting. New York, for one, seems, to be at least a year away from it and California even further distant.
In the short term then, we wouldn’t bet on seeing the Garden State’s charge to the top being ended sometime soon.
