June 14, 2018, was a landmark day for New Jersey. By putting $20 on Germany to win the World Cup and another $20 on the NJ Islanders to win the NHL’s Stanley Cup, Governor Phil Murphy marked the first-ever legal wagers on sports in the state.
Both bets ended up being duds, but we’re pretty sure no one cared. After a long and difficult legal battle, sports betting had finally become legal in New Jersey. And that one moment marked the start of a seismic evolution to the state’s gambling scene.
What’s Happened Since
Even the most positive outlook could not have predicted just how successful sports gambling would become in New Jersey. Since Governor Murphy’s initial wager, the state of New Jersey has seen over $7.6 billion spent on sports gambling, translating to $532 million in revenue.
These jaw-dropping figures have taken New Jersey to the pinnacle in terms of gambling takings, sitting pretty just behind the perennial leaders Nevada, the home of Sin City. And Covid-19 may push Vegas closer to the brink, with NJ seeing increased from-home bets as a result of the nationwide lockdown.
Even before the pandemic, New Jersey was taking in some serious numbers. NJ has always been home to a large number of gamblers, and making the transition from the casino to the sportsbook is not a major leap (unlike in other states, where things are a little more strict).
New Jersey has also benefited from non-state gamblers. They’d come in by train out of state with the singular intention of a wager, with many placing bets from their smartphones just outside the train station.
Figures have shown that New Yorkers, specifically workers based in Manhattan, are making regular journeys to places like Jersey City, Hoboken, and Newark just to get their sports bet fix. People are placing bets in restaurants, bars, and even airport terminals.
According to one New Jersey company, FanDuel, New Yorkers account for about 22% of its total mobile betting take. These out-of-state visits are so lucrative that companies are even organizing free shuttle buses from New York to New Jersey.
This is all because gamblers need to be physically present in order to put down a bet. Using a New Jersey-based website isn’t enough. And many proxy services can’t circumvent the advanced geolocation software companies have in place.
Will New Jersey Take Nevada’s Crown?
In a pre-lockdown world (remember those days?), predicting Nevada losing the number 1 gambling spot would risk a visit from a doctor. You know, to get your head examined.
And now? It’s a serious possibility. In the month of July alone, New Jersey’s sports betting takings overshadowed Nevada’s, with $315 million compared to the ‘paltry’ $163.6 million. We very much expect these numbers to look similar once the August figures are released.
The reason for this is the percentage of gamblers placing their bets online. In New Jersey, that number already stood at just over 80%, rising to 94% in July. In Nevada, online bets come from just 69% of gamblers. When you’re in the middle of a lockdown and you can’t visit your favorite casino, those numbers really matter.
In a way, NJ’s gambling scene can be considered resistant to Covid-19. If people can’t visit a casino, no problem. Punters prefer using an app or website anyway. But we can’t imagine the droves of people that land in Vegas for a gambling-fuelled holiday to suddenly start placing bets online. It’s just not the same type of gambler.
Ticking Time Bomb: When New York Legalizes Betting
There’s one little potential hitch to New Jersey’s plan to take over the sports gambling world. Once New York legalizes online sports betting (something experts widely predict will happen), New Jersey will lose a huge chunk of its revenues.
James Kisby, an analyst working with Gambling Compliance, believes New York will likely introduce the popular mobile gambling option in 2022. However, with Covid-19 shrinking state revenue streams, it’s possible that they’ll put these plans on hyperspeed. Is a 2021 launch potential? We certainly think so.
What Can We Expect in 2021?
According to the experts, Covid-19 is going to stick around for quite some time. That’s going to spell potential disaster for land-based casinos and sportsbooks. With New Jersey being home to mainly mobile sports gamblers, it’s likely that the state will take a leading role in terms of gambling revenues.
But predicting the exact trajectory is difficult. It ultimately depends on a variety of factors: Covid-19, developments in state legislation, and what neighboring states start doing. If New York introduces mobile sports gambling, for example, New Jersey will need to pivot.
Whatever happens, it’s going to be an exciting year for sports betting in New Jersey. We’re still very much at the ‘baby stage’, and we’ll undoubtedly see some major developments in the next few years.