The Garden State’s sports betting industry turned a year old earlier this month, a milestone for the state that fought, and won, against the sports leagues in defeating the 1992 federal law known as PASPA. NJ is approaching $3 billion in total bets since legal sports betting began.
In May, the online/mobile and brick-and-mortar sportsbooks recorded about $318.9 mm in bets, according to the NJ Division of Gaming Enforcement. According to figures from the Nevada Gaming Control Board released Thursday, the NV books took roughly $317.4 mm in handle in May.
It was the first time that, on paper, NJ overtook NV in sports betting handle. It highlights the success of the NJ market in year no. 1. The market will only continue to grow.
But is too much being made about the accomplishment of overtaking NV in May?
The NJ market is young and is home to 13 online sports betting operators, so acquiring new customers is paramount. In order to obtain new players, the NJ books offer attractive promotions that include bonuses or free wagers. It’s meant to encourage people to sign up and deposit.
The DGE includes these free bets in the handle figure, and they could account for 15-20% of the wagers right now. That percentage will fall over time.
NV doesn’t include any free wagers in its reported statewide sports betting handle.
For example, at the Golden Nugget Online Sportsbook in NJ, customers can take advantage of a promotional offer that allows them to place a risk-free $50 bet. If your $50 bet loses, GN will refund your bet in the form of a $50 free bet. That $50 free bet, which isn’t money that you deposited onto the site, would count toward the NJ statewide handle.
So, a customer deposits $50 and loses that $50 bet, but receives $50 back to make another $50 bet. That would count as $100 in handle for the DGE, even though the customer in reality wagered only $50 of their own money. It’s a one-time offer, but it can contribute a sizable chunk to the statewide handle.
Sports betting-related promotions in NV aren’t what they are in NJ partly because the former has had sports betting for decades.
It’s worth noting that brick-and-mortar sports betting is stronger relative to the online/mobile hande in NV than it is in NJ. In the former, online/mobile sportsbooks can’t allow customers to register remotely from anywhere in the state. That’s part of the reason you don’t see promotions galore in NV.
NJ should eventually be king
NJ has a much larger population than NV (approximately 9 mm in NJ, compared to about 3 mm in NV), giving it a higher ceiling for sports betting. More than 82% of NJ’s handle comes via online/mobile, a share that isn’t surprising considering the factoring in of the free bets. Still, sports bettors have spoken and they prefer gambling over the internet, which is much more convenient in the world of sports betting, where lines can change quickly. For those looking for the best value in their wagers on a consistent basis, traveling to the nearest b&m sportsbook isn’t ideal.
In-game betting is expected to grow in popularity as the sports betting industry evolves, a form of wagering that is best suited for online/mobile, so NJ’s online/mobile handle in terms of a percentage of total handle should keep growing incrementally over time.
It’s worth noting that NJ also passed NV’s handle for a single month during the slow season for sports betting. Baseball is front and center right now, and you could argue that NJ is probably home to more baseball fans than NV, given the popular MLB franchises in the Northeast. NV is still a significantly more robust market when it comes to March Madness and football wagering. NJ has more restrictions on betting on college sports than NV does, which doesn’t help the Garden State.
A 2017 Oxford Economics study, commissioned by the American Gaming Association, found that NJ has the potential to see double the annual handle that NV does.