The New Jersey Department of Gaming Enforcement has released the February 2019 revenue report for New Jersey‘s sportsbooks. A deeper dive into the numbers reveals three main takeaways from the sportsbooks’ performance last month.
There’s a new sheriff online: FanDuel
The takeover is not completely unexpected. FanDuel had made significant moves to close the gap in recent months. It had lagged behind DraftKings by only a million dollars in December 2018 and January 2019.
What is most surprising is the margin of difference that FanDuel enjoyed in February. The company outpaced DraftKings by nearly $2 million.
In actuality, the story is more about a DraftKings decline than a FanDuel ascent. FanDuel increased its month-over-month revenue by about $800,000, but DraftKings earned a whopping $3.1 million less than it did in January.
The performance in a single month is not a big enough sample size to draw too many conclusions yet. However, it can’t hurt FanDuel that its physical location is a mere six miles from America’s most populous city — New York City — that has no sports betting of its own.
Retail NJ sports betting was a loser
One of the most shocking revelations from February is how poorly retail sportsbooks performed. Overall, retail operations actually lost $118,543 as a group.
Individually, seven of New Jersey’s 10 sportsbooks lost money last month. Two more books held no more than $150,000 for their efforts.
In fact, the only retail sportsbook that could call February a success is the FanDuel Sportsbook at Meadowlands. The retail portion of that operation declared revenues just under $1.5 million for the month.
At the other end of the spectrum, Borgata‘s retail sportsbook ended up holding the biggest bag. The Atlantic City property paid out $715,727 more than it took in wagers.
Monmouth Park‘s retail sportsbook also took a big hit, losing over half a million dollars in February. Two other live New Jersey sportsbooks lost more than $100,000 during the month.
The most popular sports are the least profitable
So far in 2019, bettors have placed just over $705 million in wagers in New Jersey sportsbooks. In aggregate, that activity has translated into roughly $36.2 million in revenue.
Overall, New Jersey’s hold percentage, or revenue divided by handle, is 5.1 percent for 2019. Based upon UNLV historical research, that brings New Jersey into the same realm of profitability as Nevada sportsbooks.
However, a closer look at the hold percentages reveals a disparity between different sports in terms of their profitability. In fact, one major sport has barely been worth the trouble.
Basketball has been the most popular sport this year, with more than $287 million wagers placed upon the sport’s events. From those, New Jersey sportsbooks have only kept about $10.5 million in revenue. So, basketball’s hold percentage is a mere 3.4 percent.
The second most popular group, the “other” sports, have benefited their sportsbooks by only $6.53 million this year. This is a lot of money, but not when the books had to process over $181 million in bets to get it. Other sports have a hold percentage of just 3.6 percent.
In fact, all individual sports in New Jersey fell beneath the average hold percentage year-to-date. Even football, America’s favorite sport, only allowed books to keep 4.6 percent of their wagers.
As it turns out, the higher hold percentage is the result of parlay betting. Sportsbooks have kept a whopping 11.2 percent of parlay bets so far this year.
February New Jersey revenue conclusion
Overall, February was a rough month for New Jersey sportsbooks. They accepted $65 million less in wagers than in January 2019. Even worse, the February hold percentage was an abysmal 3.9 percent. Several books lost money.
However, as in all gambling, things are cyclical. One bad month doesn’t mean anything is permanently broken.
Not yet, anyway.