Well, the final numbers for sports betting to come out before the start of the NFL regular season have been released, and it is safe to say that New Jersey is happy about being able to bet on sports legally! There was an increase in the overall handle, which is not shocking, but it is the breakdown of where and what players bet on that is even more interesting to dissect.
First off. Let’s have a look at the numbers themselves from the New Jersey DGE:
Fanduel/Meadowlands $3.06 M
Draft Kings (Resorts) $2.97 M
Monmouth $0.89 M
Borgata $0.85 M
Ocean $0.52 M
Harrah’s $0.29 M
Bally’s $0.26 M
Golden Nugget $0.21 M
Resorts $0.09 M
Overall, that is a pretty decent haul for a month that really only offered baseball as the major sports offering. For New Yorkers, there was also betting on the U.S. Open, and that included a lot of in-play betting that the state is counting on for future revenues. To the end of August, there had only been 5 million of handle on football (no shocking as it was reduced to pre-season NFL and one week of college ball), while there was 84 million bet on baseball.
Digital is the new frontier
Draft Kings are easily the big winner in this month of betting. The fantasy site turned sportsbook was the first to launch, having put their mobile platform out on August 1st. While there were a couple of hiccups along the way, first having clearly put them in an excellent position to attract players. This, in combination with brand recognition, had Draft Kings within striking distance of Fanduel for the top spot in New Jersey. These two companies have been doing battle for a long time in the DFS world so you can expect them to continue the strong fight into this legal sports betting arena.
Two other companies launched their digital products in the month of August – Borgata and Golden Nugget – but as they both launched late in the month, it will be September when we see the real bounce both companies get in revenues.
The tax revenue is a nice add
Of course, one of the main benefits of legalizing sports betting in the U.S. is to reap the taxes that are created from all these new revenues. This has been a major argument in favor of regulations for years, as the industry already exists in black market form but without any of the money coming into the coffers of the governments.
This month, the taxes paid by the operators on sports betting amounted to just shy of 1 Million dollars. While this may sound like a small amount, the fact is that this industry has been live for only a few weeks, and this is the slowest part of the sports calendar for Americans.
A good portion of this tax revenue came from Draft Kings, who were paying the higher 13.5% tax rate on internet wagering. It will be interesting to watch these tax numbers as the rest of the books launch digital platforms – with a higher tax rate for the internet bets, maybe some casinos will be more interesting in pushing players into their facilities.
Too many competitors?
While we expect the numbers to continue to grow by leaps and bounds into the football season, we will also start to watch to see if there are too many competitors in the space. When internet betting is involved, it will become a free-for-all to try to attract New Jersey players. There is no question that other states will be following intently as each of these brands tries to find their place in the market. It is conceivable that they can all coexist, but there will clearly be leaders in the space, which is where Fanduel and Draft Kings find themselves.
All of this without football
Any of us who are int eh gambling industry are all focused on the same thing – what will the numbers look like during the NFL season? Between NFL and college, there are dozens of games to bet on each week, and the offshore market claims that up to 70% of their annual handle comes on football alone. So, if the numbers hold up in regulated gambling, then we should see a significant spike in traffic and handle over the next few weeks. We’ll all be on standby for the DGE release in October, and then we can really start to project what this will look like for other states in the coming months.