Will Sports Betting in New Jersey overtake Nevada?
As the numbers are being prepared for the first full month of results of legal sports betting in New Jersey, all indications are that it was another stellar month in July. Already in August, there have been reposts of an excellent in-game handle on tennis at the US Open (likely more popular than the other events due to the night matches and its proximity to the sportsbooks), and baseball betting has remained strong. The addition of both college and professional football means that the books are rounding into shape for the fall sports season.
While it is far too early to say, there are some questions about whether or not New Jersey’s handle will ultimately surpass the 5 billion USD that Nevada put through in 2017. This could be simply a symbolic scenario, or it could be the start of the decline in betting in Nevada. Let’s look at how this could all shake out.
How could NJ take over Nevada in handle
It really comes down to math when calculating the potential size of the New Jersey market. First off, the population of New Jersey is much larger than Nevada (approximately 3 times the size), so from that, you could ascertain that the sports betting would be much higher amongst locals. Also, there is a higher concentration of wealth in the Garden State, as many people who work in Manhattan live across the river in New Jersey.
This could also add to the possibility of more revenues for sportsbooks in the state since the average bet size could be higher. Finally, there is a far more concentrated population on the east coast, and this has created intense rivalries between fans of the teams in the region. This will also result in more betting on the home teams, and while this may or may not be good for books, in the long run, it will for sure add to the overall handle.
What could stop New Jersey from overtaking Nevada
There are some factors that could, in fact, allow Nevada’s handle to grow despite the regulation of the market across other states. First off, while there are only about 3 million residents of Nevada, there aren’t many places that have as much tourist traffic than Las Vegas. These folks add a significant amount to the sports betting handle in the state, and even though people may be able to be in their own state legally, one could make the argument that this will make them gamble more when they hit the Strip.
Also, the introduction of the NHL and NFL to the city in the way of franchises will undoubtedly increase the overall awareness of sports betting in the state. The magical run of the Golden Knights last year in hockey saw a ton of betting action on the NHL – far more than the books had ever seen in the past. The Raiders coming to town in 2020 will draw fans from around the U.S., and we expect that this will also bring an increase of handle.
Finally, as the states that border New Jersey start to roll out their regulations and award sports betting licenses, there will be more competition for the New Jersey sportsbooks. As it stands, New York and Pennsylvania do not have operations, although they will be coming shortly to the latter. When that happens, players won’t need to travel across to New Jersey to get their bets in, which may have an impact on the overall business.
Does any of this matter?
Well, in the grand scheme of things for gamblers, the short answer is no. However, there are some significant consequences for both states. First and foremost are the tax dollars that are generated by sports betting in the states. This is one of the main reasons that states wanted to get into the game in the first place, and a bleed of bets from Nevada back to home states could result in a drop of taxes collected by the Nevada State government. This could then impact other areas of the state that today rely on those dollars.
In the long run, the increase in overall tax dollars is good for everyone. More importantly for New Jersey, sports betting revenues will be able to prop up the Atlantic City casinos that have struggled in recent years. This means that more residents of that state will remain employed, which means less of a drain on the public infrastructure. Overall, we are very happy that sports betting is going to be legal across the majority of the U.S., and we hope that Nevada doesn’t suffer too much as a consequence.