What are the odds New Jersey passes Nevada in sports betting this season?
This week, the highly-anticipated September sports betting number for New Jersey sportsbooks were released, and the overwhelming response is very positive. While the numbers from the summer were encouraging, most industry experts were waiting to see the numbers from the first month of football before fully passing judgment.
Huge Growth, but compared to what?
The numbers, which David Rebuck of the New Jersey Division of Gaming Enforcement teased during a presentation at G2E in Las Vegas last week, were definitely a move in the right direction. The state took in $184 million in bets in September, almost double what the state took in during the previous month. This can essentially be attributed to the start of the NFL season, with some playoff baseball thrown into the mix. From that handle number, New Jersey sportsbooks retained 24 million USD in revenues.
While these numbers are impressive, it is hard to say if they are going to grow or drop from the excitement of the first month of the football season. Optimists will say that this is just the start, while those with knowledge of the offshore industry seem to be more realistic about the conversion of offshore players in New Jersey to regulated sportsbooks.
The Completed Events win percentages of 7.9% seems to indicate that there is more betting by the general public or amateur players, which would be another positive sign for the industry as a whole. However, there were many significant upsets in the NFL in the first month, and this will have had an effect on the numbers. We will need to see many more months of a sample size to see what the effective hold rate is in New Jersey.
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Mobile is the way
One of the most shocking figures from the September numbers is the sheer amount of volume being processed in the mobile betting space. Of the $184 Million bet in the month, $104 million come from online and mobile betting, with the companies remarking that mobile far outpaced traditional web betting.
The runaway leader in mobile betting in New Jersey is Resorts, of which the lion’s share went to Draft Kings (they recently launched another skin with BetStars, a division of poker giant PokerStars. Both Draft Kings and BetStars will have a distinct advantage in the space, along with competitor Fanduel.
These companies have been operating products in New Jersey for years, and as a result, they likely have huge databases of players already. This allows the companies to focus on conversion efforts rather than spending money on acquiring new players. With the digital space heating up and many more players entering the market, we can expect other operators to close the gap, but the early entrants have an excellent head start.
Fanduel released a statement to go along with their September figures. “As our retail Sportsbook at the New Meadowlands Racetrack grows and with the launch of the FanDuel Sportsbook app, consumer response continued to exceed our expectations in September. We are encouraged to see strong momentum in New Jersey for the newly formed FanDuel Group.
In September, we brought in over $175 million in handle and entry fees across all products (Sports Betting, DFS, Horse Racing, and Online Casino). We look forward to continuing this growth by delivering the best experience for customers across the state.”
Passing Nevada on the horizon?
One of the big questions that the industry is asking is how long Nevada will hold on to the top spot in the regulated sports betting space. In 2017, 5 Billion USD was bet in the state, with a hold of just over 5% resulting in $265 in revenues. With an initial September number of $24 million in revenue, all indications are that New Jersey will shortly pass the revenue figures of their counterparts from the west. However, much of this is based on a hold percentage that is dramatically higher in the Garden State.
Whether or not New Jersey or any state passes Nevada in revenues is purely ego-driven. The more important figures will be the sustained growth of the industry as a whole and determining how many players can coexist in the state. If the offshore business is any indication, there should be lots of revenue to go around, but Draft Kings and Fanduel have a clear advantage at least for this football season.