Legalized sports betting is only a few months old in New Jersey, but it appears to be off to a very strong start.
Gamblers bet nearly $100 million in New Jersey on sporting events last month, easily topping the $40 million wagered in July, according to figures released by the state earlier this week.
The betting volume is only expected to increase in the coming months as the lengthy collegiate and professional football seasons just got underway last weekend, say regulators and sportsbook operators who testified before lawmakers in Trenton yesterday. The hearing was held to provide lawmakers with an update on sports betting since it became legal at casinos and racetracks in New Jersey three months ago.
“It has been very exciting,” said Sharon Harrington, vice president of the Atlantic City-based Casino Control Commission.
But it remains to be seen whether sports wagering can eventually become the type of fiscal force that lawmakers were hoping for when they adopted legislation earlier this year in the wake of a major Supreme Court ruling that paved the way for legalized betting. The early returns have stoked expectations in a state that is well-known for revenue shortfalls and other budget problems.
Lawmakers originally set a revenue goal of $17 million from taxing sports betting, but the state budget that Gov. Phil Murphy signed into law in early July is counting on $25 million to be collected by the time the fiscal year closes next June. Counting the roughly $140 million that was bet in July and August, a total of $16.5 million in gross revenue that is subject to state taxation has been generated since mid-June, including $9 million in August.
‘Shot in the arm’ for casinos
“Obviously after a downturn in the casino industry this is a real shot in the arm,” Assemblyman Ralph Caputo (D-Essex) said during yesterday’s hearing. “It’s probably the biggest thing that’s happened in many years.”
Under the new law enacted by Murphy earlier this year, only casinos in Atlantic City and licensed horserace tracks can offer in-person sports betting and operate online wagering sites. Bets can be placed on all professional sporting events, including those in New Jersey, as well as on collegiate sporting events that do not involve a New Jersey-based school or those that take place in New Jersey.
The state is levying a tax rate of 8.5 percent on in-person gambling, and a 1.25 percent surcharge that raises revenue for Atlantic City and the host communities of the racetracks. The tax rate is 13 percent for online bets, plus the 1.25 percent surcharge.
A total of eight licenses have been issued for sports-betting operations in New Jersey since it was legalized, said David Rebuck, director of the state Division of Gaming Enforcement.
Meadowlands Racetrack sets the pace
The August revenue figures, which were released this week by Rebuck’s agency, include action at six casinos and two racetracks, with the sportsbook of the Meadowlands Racetrack, which is adjacent to MetLife stadium in East Rutherford, setting the pace early on.
“You don’t have to be a genius to figure out that we have a great location,” Meadowlands operator Jeff Gural said during the hearing in Trenton.
“People like to come and be in the environment where you can watch every game (on television),” he said. “Something goes wrong here, (but) it goes right over there. It’s a lot of fun.”
Gural and others who testified before the lawmakers gave credit to the state’s regulators for working hard to make sure the sportsbooks could start operating right after Murphy enacted the legislation. That action came about a month after the Supreme Court sided with New Jersey after years of litigation that challenged federal gaming laws which had allowed sports betting in Nevada and only a handful of other states.
Monmouth Park — where Murphy went to place the first legal bet — was among the sportsbooks that were able to take advantage of this summer’s World Cup soccer tournament. “The World Cup was actually a really great event for us,” said Bill Knauf, vice president of business operations at Monmouth Park.
Football season promises rich returns
But after seeing the crowds for the first week of football season start gathering around 9 a.m. last weekend, Knauf predicted football “is where the money is going to be.”
“That was really exciting,” Knauf said.
He also said there has already been some crossover between patrons who have come to the facility to bet on sporting events and then end up also wagering on a race. That could provide a much needed boost for the racetracks in the wake of recent struggles. “We definitely feel like the sports fan can help us out,” Knauf said.
Harrington said sports betting is also providing a boost for Atlantic City, which recently saw two new casinos open along the boardwalk. One of them, Ocean Resort Casino, which is located at the site of the former Revel, was third in gross revenue from sports betting in August. “It’s been a good amenity to add to the portfolio,” Harrington said.
Nevada collected roughly $250 million from sports betting last year, a small percentage of the overall $26 billion in casino revenue generated statewide, according to that state’s Gaming Control Board. Dustin Gouker, lead sports-betting analyst for the website PlayNJ.com, predicts that New Jersey’s sports-wagering market could eventually surpass Nevada’s once it is fully built out over the next several years.
“We could see sports betting grow by more than 300 percent in September as NFL and college football ramp up and the number of options for online sports wagering in New Jersey continues to grow,” Gouker said in a news release issued earlier this week.
“September will be an enormously important month for New Jersey’s legal sports-betting industry,” he said.