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New Jersey's Billion Dollar Sports Betting Streak Ends After 5 Months
By Jeff Osienya Mar 19, 2022 IndustryNew Jersey’s sports betting market has slowed down in February, following a consistent 5-month 1 billion-plus stint in sports wagers. Meanwhile, better weather in the second month of the year has led to a boost in gaming revenue.For years, the Garden State has been setting records in the US sports betting market and recently hit an all-time high handle of $1.349 billion in January. Moreover, in the 2021 calendar year, sportsbooks in the Garden State processed $10.93 billion in sports wagers. A considerable fraction of this handle has been coming from online and mobile sports wagering – a vertical that has been showing robust figures since the onset of the Covid-19 pandemic. Better still, the last five months have seen New Jersey on a hot streak of consistently winning a sports betting handle at just over $1 billion.
However, for the first time since September 2021, the Garden State fell short of the ten-figure monthly handle in February after in-state sportsbooks collected $985.6 million worth of wagers. The New Jersey Division of Gaming and Enforcement (NJDGE) reported a 26.9% drop in the sports gambling handle compared to January’s record-setting handle. The total sports betting revenue also suffered a decline from $60.196 million in January to $30.873 million in February, translating to a massive 48.7% month-over-month dip.
Did New York Steal New Jersey’s Thunder?
While most may not see the dip as a disappointment, many industry observers have one question popping in their heads, ‘has New Jersey’s performance been affected by neighboring New York’s recent success?’ Remember, the Empire State only launched its regulated online and mobile sports betting market on January 8th. Yet, within the first 30 days of mobile sports betting operations, New York surpassed New Jersey’s January sports betting record by registering a historic $1.98 billion.
Come February, The Empire State cemented its position as the highflyer in USA’s regulated sports betting scene by racking up a $1.54 billion handle in February. We must admit that it may be a while before any other state tops that amount. As much as New York’s sports betting colossal rise to prominence may not have been surprising, all eyes were fixed on New Jersey, especially with the state’s history and apparent success in the industry.
So, back to our question, is NY guilty for the decrease in NJ’s sports betting handle and revenue? Well, it’s still too early to start pointing fingers as the February decline has been witnessed in other states, including Iowa, Tennessee, Indiana, and even New York itself. This means that there may be other underlying factors that could have influenced the lower numbers.
For instance, February is the shortest month of the year and incidentally, the month coincided with the end of the 2021-22 NFL season on the 14th. Besides, some analysts have also pointed out that New Jersey sportsbooks have been experiencing oscillating performance patterns depending on gaming seasons. And so, New York’s entry into the space may not necessarily have affected the former’s revenue stream.
The Garden State’s Gaming Revenue Continues With its Growth Curve
One thing to note is that as much as the sports betting revenue in New Jersey saw a major change for the negative, this is not the case for the overall gambling revenue for the entire state in February. There was growth in NJ’s year-on-year gambling revenue for February to $373.3m (29.5% from February 2021). Additionally, since the beginning of the year, the combined revenue encompassing slot machines, table games, racetracks, and iGaming activities has jumped 19.0% from the same period in 2021.
Following an analysis of the general performance of the NJ betting market, the president of the Casino Association of New Jersey (CANJ) and Hard Rock Hotel and Casino, Joe Lupo, expressed some excitement for the revenue growth. He even declared February to be one of the best months in the NJ casino industry since the reopening of casinos in late 2020. He stated, “The Casino Association of New Jersey is very pleased with the industry’s performance this past month.” He observed that following heavy snowfall in January, the warmer February weather at the Jersey Shore may have had something to do with improved revenue.
Hard Rock won the second-highest revenue for February and the highest percentage increase compared to its peers. Furthermore, this rise in revenue for all the major operators has been attributed to the increase in tourist activities in Atlanta City. This has, in turn, led to a busy month for the brick-and-mortar casinos in the area as more and more gamblers opted to resume in-person betting following the lifting of mask mandates and occupancy limits at resorts and hotels. As a result, the nine land-based casinos collectively reported a 43.3% year-over-year revenue jump compared to the same month in 2021, with the Borgata bringing in 39.5% more than pre-pandemic February 2019.
The Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism (LIGHT) faculty director Jane Bokunewicz elaborated on the possible reasons why the Atlanta City gambling market saw its revenue continue to improve in February. The Associated Press quoted her statement:
Quote“Popular holiday weekends such as Presidents’ Day and Valentine’s Day and waning public concern for public health threats related to COVID-19 may have given a boost to brick-and-mortar gaming figures… Further relaxation of pandemic-related precautions nationwide gives us hope that spring 2022 will return operators to a pre-pandemic operating environment.”
All Eyes on March Madness
As sports betting fans shift their focus onto the March Madness season, analysts will be waiting with bated breath to see what this next phase holds for the Garden State. However, for those aware of New Jersey’s stance on betting on collegiate sports betting events within the state and on betting on local college teams, betting on the NCAA Men’s College Basketball Tournament is not going to be a simple matter.
In fact, in November 2021, about 57% of voters rejected a constitutional amendment proposal put forward to legalize bets placed on NJ college teams. This poses a serious risk to the state’s current predicament as far as sports betting is concerned since punters in New Jersey can’t wager on matches played by 3 in-state teams, namely Rutgers, Seton Hall, and Saint Peter’s. Either way, we do not doubt that the pioneer of sports betting in the US will try its best to get ahead of February’s handle. However, whether or not The Garden State will reclaim its top-dog status from The Empire State in March remains to be seen.
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