Officials snipped the ribbon to open DraftKings’ new Hoboken headquarters — a high-rise hive of 65 technical experts devoted to promoting the company’s booming sportsbook in New Jersey — where the industry is only a year old but seeing explosive growth from Atlantic City to the Meadowlands.
“I knew New Jersey was going to be big. Especially with the way that New Jersey did it. They did it the right way,” said Jamie Shea, DraftKings senior director for digital sportsbook operations.
“It’s amazing. Over the past year we’ve really grown our talent in New Jersey, and New Jersey has really become the gaming capital of the United States,” said Paul Liberman, the COO and cofounder of DraftKings.
“Nevada last year had a total sports betting handle of over $5 billion, which is a record year for Nevada. But New Jersey brought in $3 billion, so there’s certainly a lot of opportunity and a lot of activity in the New Jersey market,” said the vice president for strategic communications at the American Gaming Association, Casey Clark.
In a matter of months, New Jersey’s ramped up from zero sports betting parlors to 10. Eight of them are at Atlantic City casinos, two at racetracks — the Meadowlands and Monmouth Park.
Breaking Nevada’s monopoly
Gov. Phil Murphy placed Jersey’s first legal sports bet at Monmouth Park a year ago, June 14, after the state finally triumphed in the U.S. Supreme Court. The ruling broke Nevada’s monopoly on sports betting, cutting itself a fat slice of the market, particularly in online gaming.
“People want to be able to bet from the comfort of their home. They want to bet from their couch,” said Shea. “So if you want to bet while the game is going on, it’s such a quick turnaround. You’ve got 30 seconds and you’ve got to make these wagers. So to have mobile betting is really important. I think 85 percent of the bets so far in New Jersey have been mobile.”
Out of eight states that now offer sports betting, only four — Pennsylvania, Nevada, West Virginia, and New Jersey — let you wager online. In New Jersey, mobile sports bets earned $82.8 million in actual revenue for the year. Compare that to $3.3 million in revenue from on-site casino parlors and $13.7 million on location at the tracks. Jersey’s grand total: almost $99.8 million in sports betting revenue through May. As for state tax revenues for the first year, they hit a modest $22.8 million.
But Jersey sports betting had another mission. Supporters hoped it could rescue New Jeresey’s flailing horse racing industry. At the Meadowlands track, FanDuel set up a sportsbook that earned $8.6 million in revenue onsite, making it the state’s most lucrative betting parlor and the track’s salvation, says CEO Jeff Gural.
“I don’t know how much longer I could’ve kept the Meadowlands open. I was losing a lot of money, millions of dollars a year. So this really saved the day,” Gural said. “I would expect that this year we’ll do about $500 million in revenue at the Meadowlands and online maybe $2 billion. So from my standpoint, it’s a huge success.”
Giving Atlantic City a boost
Sports betting also aimed to boost Atlantic City’s gaming industry, which added two new casinos over the past year. Overall gambling revenues there subsequently rose more than 20 percent. Early on, New Jersey’s Economic Development Authority recognized the high-tech mobile sports-betting industry perfectly matched Murphy’s prized innovative-company blueprint. State officials like the EDA’s Bill Penders swooped in to help.
“These companies can come here and become operational very quickly and take advantage of this growing market. And I think that’s really the key: It’s more about strategic support, as opposed to an incentive,” said Penders, an EDA senior adviser. “So, we have a lot, we’ve created an ecosystem that really makes it attractive for these companies to come in, set up their operations, get licensed to operate, hire quality people.”
Penders said FanDuel, another major sportsbook company, plans to expand its Jersey City office.
DraftKings, meanwhile, is already outgrowing its new headquarters. It’s looking at acquiring more space and hiring perhaps 40 more staffers as sports betting continues its Jersey boom.