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New Jersey continued its impressive sports-betting growth in 2021, more than doubling the revenue of the previous year, but as the calendar turns, the state’s sports-betting market now faces the biggest threat yet to its meteoric rise.
State-licensed sportsbooks brought in almost $816m in gross revenue last year, a nearly 105 percent increase on 2020’s COVID-affected proceeds of nearly $356m.
The state also shattered previous highs for annual sports-betting handle, with more than $10.9bn in bets being placed in 2021, an 81 percent increase over 2020’s nearly $6bn in wagers.
The massive handle was powered by four consecutive months during the NFL season with more than $1bn in wagers, after New Jersey in September became the first U.S. market to ever reach that figure.
In December alone, sportsbooks brought in $1.2bn in wagers, trailing only October 2021 as the highest volume month in the state, and produced $59m in gross revenue.
By gross revenue, however, December was the worst month of football season for Jersey sportsbooks, with only a 3.9 percent winning percentage, whereas in September through November, books brought in between $82m and $114m in monthly revenue, with holds ranging from just over 6 percent to almost 9 percent.
FanDuel remained the market leader throughout 2021, earning almost half the state’s market share, according to VIXIO GamblingCompliance estimates, while DraftKings and BetMGM earned second and third place positions with estimated market shares of almost 20 percent and 11 percent, respectively.
Although New Jersey will likely stay near the top of the U.S. market-share leaderboard, its position at the summit could be threatened as early as this year as a result of the launch of mobile betting in its northern neighbor, New York.
Five of the Empire State’s nine selected online operators have now launched, following the New York State Gaming Commission (NYSGC) giving BetMGM the green light to begin accepting wagers Monday (January 17).
“We'll now be able to fully activate our relationships with MGM Resorts' Empire City Casino and Madison Square Garden,” said BetMGM CEO Adam Greenblatt in a press release. “We look forward to offering customers in New York unique experiences that they can't access on any other platform."
PointsBet, WynnBet, Resorts World and Bally’s have yet to receive clearance from the NYSGC to begin accepting wagers.
Although some operators licensed in both states may push New York-based customers to play in neighboring New Jersey due to its far more favorable 14.25 percent effective tax on online wagering compared with 51 percent in New York, at launch many operators have offered promotional play and markets in New York comparable to those in the more affordable New Jersey market.
For New Jersey, in the interim, the state will have to cope with the loss of some players from New York City who until recent days would make the short trip by car or train across the bridges and through the tunnels that join the city with New Jersey to place their bets, a far shorter trip than the several hour trip upstate to place land-based wagers in the Upstate New York casinos that were permitted to accept wagers prior to this month.
Even when discounting the online wagering, as a point of comparison, New York’s four commercial casinos brought in little over $23m in sports-betting revenue in 2021, whereas the Meadowlands Racetrack, the closest retail property to New York City on the New Jersey side, brought in about double that, producing more than $47.2m in gross revenue.
