The future of the U.S. sports-betting market hinges on the three states of California, Florida and Texas, with excessive advertising a legitimate risk but cannibalization of traditional casino revenue not a concern, according to New Jersey’s chief gambling regulator.
None of those states are accepting wagers on games now but appear to be trending in that direction.
“You add the population of those three states, you get to almost 90 million people,” David Rebuck, director of the New Jersey Division of Gaming Enforcement (DGE), said during a keynote address at Seton Hall University’s annual gambling law bootcamp on Monday (May 16) in Newark, New Jersey.
“If those three states legalize sports wagering, you won’t need a chart [tracking sports-betting states] anymore. There will probably be one state that remains without sports wagering. Guess which one that is, and you get a brownie point if you said Utah,” Rebuck said.
The biggest challenges facing California, Florida and Texas if they legalize sports betting, Rebuck said, will be how to manage online sports wagering and online casino games.
Rebuck said New Jersey Governor Phil Murphy, a Democrat, recently asked him why the state’s sports-betting handle did not go down during the months of February, March and April when sports betting was exploding in neighboring New York following its launch of mobile wagering.
“I don’t know — that’s what I told him,” Rebuck said.
It took more than the U.S. Supreme Court’s decision on May 14, 2018 to allow states to legalize and regulate sports betting to create the rampant expansion of the sports wagering industry, according to Rebuck.
“To me, what we have done in New Jersey allowed the sports wagering industry to grow into a tsunami impact throughout the country,” Rebuck said.
New Jersey, he said, developed a successful regulatory model for sports betting which other states have emulated.
“People say, ‘Well, Nevada already had a regulatory model in play.’ I’ll put our regulatory model against theirs,” Rebuck said.
Rebuck also dismissed the notion that the United Kingdom and Europe have stronger gaming regulatory models than New Jersey.
“I would say to the industry, ‘Don’t come to me and say we have a flip-of-the-switch solution because we do this in the United Kingdom or European operation.’ I tell you, ‘Take what we have in New Jersey back to the United Kingdom and back to the EU, copy us because it’s a stronger model of regulation,’” Rebuck said.
On the other hand, Rebuck said he has heard the UK is using technology to improve methods to promote responsible gaming.
“If they’re doing it well, I guarantee you we will steal everything they have … and we’ll implement it,” he said.
“Because as we all know in the gaming industry, this is a copycat industry. If it works well, everybody’s going to jump on everybody’s back and declare victory. If it doesn’t work well, the person who’s trying it is going to get criticized for not knowing how to do the job.”
Rebuck also issued a stark warning to sports-betting operators about the repercussions of excessive advertising.
“If you look at the history — certainly of tobacco and alcohol — if you can’t get control over this, the government will. The government will,” he warned.
Rebuck also complained about “misinformation” alleging New Jersey’s gaming industry was better off in 2019, the year before the COVID-19 pandemic shuttered Atlantic City casinos for several months.
As online casinos have continued to soar, New Jersey's traditional gaming industry has not quite hit the same heights as numerous other states that were able to report all-time record revenues once their land-based casinos fully reopened in 2021.
“I do have some in the industry and some in the media who say, ‘Well, New Jersey — your bricks and mortar [casinos] are cannibalized; you’re not doing as well as you used to,” Rebuck said.
Rebuck noted bricks and mortar casinos in New Jersey reported revenue of $253m “with change” in April compared with $207m in April 2019. Monthly revenue for internet gaming was $136.9m, more than $100m greater than April 2019, according to DGE statistics.
“I’m comparing apples to apples right now, and you cannot argue that what we have done is impacting negatively the bricks and mortar industry,” Rebuck said.