Firstly, the numbers show more than 75 percent of sports betting revenues come from online.
Sports betting has been legal since the first bet was taken at the Monmouth Park racetrack June 14, and interest has grown rapidly.
Secondly, in October the licensed operators took in a total of more than $260 million in wagers. That figure is over 40 percent higher than the September numbers.
There is a rub. Although total sports betting handle was up, revenue to operators fell.
This is the nature of the sports betting beast. A run of results against the odds can create high levels of volatility for operator earnings.
Nevertheless, in the long run, the higher the handle, the higher the profits. Let’s look at those profits before getting to the third: important number.
Sports betting revenue by property
|Property (Online)||Digital||Retail||October Total||September Total|
|Bally’s Wild Wild West (Caesars, 888)||$108,359||$303,240||$411,599||$500,509|
|Golden Nugget (SugarHouse)||$151,446||$46,109||$46,109||$1,118,444|
|Monmouth Park (William Hill)||$608,611||$606,981||$1,215,592||$2,208,882|
|Ocean Resort (William Hill)||$385,641||$438,552||$824,193||$1,291,939|
|Resorts (DraftKings, BetStars)||$5,090,253||$97,313||$5,187,566||$8,785,432|
DFS brands lead the race for market share
The clear front runner in the battle for market share is DraftKings, which introduces the third-most-significant number from the October reports.
The Daily Fantasy Sports (DFS) site has rapidly and successfully transitioned to real money sports betting. It launched the first online and mobile sports betting in New Jersey. Nearly three weeks of first-mover advantage and DraftKings is now pulling in the best part of $5 million a month.
BetStars revenues are included in the total online numbers, but BetStars has started more slowly and with little marketing fanfare.
The bulk of the DGE’s online numbers come from DraftKings.
Number two in the market is DraftKings’ main DFS competitor, FanDuel. FanDuel has a credible $2.43 million in revenues from its online operation. It also powers the live sports betting at the Meadowlands racetrack.
Meadowlands is less than 20 miles from Manhattan and sits right next to MetLife Stadium. The stadium is home to the New York Giants and the New York Jets providing FanDuel with an extra bite at the market.
The FanDuel live sportsbook was also the most popular in NJ with revenues of $1.1 million, almost double that of its Monmouth Park competitor.
Add DraftKings and FanDuel online revenues together, and the two DFS brands have managed to secure well over 60 percent of the market.
Online poker stays at the bottom of the revenue pile
Last month, online poker reported its lowest New Jersey revenues since launch. October was hardly any better.
September revenues of $1,609,989 grew to $1,653,746. That’s 14.5 percent less than October last year.
The poor results betray a declining interest in online poker which may partly be the result of small player pools. Even though New Jersey has an inter-state compact with Delaware and Nevada, the combined markets remain small.
More player liquidity means higher tournament prizes, and there is nothing like a guaranteed prize pool of $1 million to attract new players.
This could change when Pennsylvania online poker gets going early next year. If Pennsylvania and New Jersey combine player pools, the poker market will double.
More players equal more marketing incentives and higher headline prizes, so don’t count out poker just yet.
Online casino continues to increase despite sports betting
Online casino revenues of $25.1 million are up 35 percent on last October’s $18.6 million.
Apart from the good news that the industry is growing, it is notable that it is growing even though New Jersey players now have access to online sports betting.
In other words, the availability of online sports betting has not led to cannibalization of online casino. Sports betting revenues appear to be incremental not merely a shift in spending.
The really good news is that this will be in no small measure due to sports bettors leaving the black market.
One of the primary consumer protection aims of legalized state-regulated sports betting is to attract players away from unsafe offshore sites. The strategy appears to be working.
Hopefully, other states will take note when formulating their sports betting plans.
Pennsylvania now has legal sports betting
Thursday, Nov. 15, saw the Hollywood Casino take the first sports bets in Pennsylvania. The test day was only to allow regulators to check out the new technology, but Hollywood will open sports betting to the public very soon.
Online sports betting will start after live sports betting is up and running. A launch in the early weeks of 2019 looks most likely.
This will be the real trigger for Pennsylvania players to leave the black market sites where they are currently placing their bets.
New Jersey’s number show the importance of states legalizing online sports betting. In Mississippi, live sports betting is authorized, but online is only available on casino premises.
Mississippi’s new laws aren’t much of an incentive for players to leave the black market.
New Jersey’s latest revenue figures strongly indicate that the best consumer protection comes from three factors:
- Legalize a wide variety of online games.
- Keep taxes low so regulated online can compete on price.
- Legalize online gambling, not just casino gambling.