New Jersey has dethroned Nevada as the leading state for sports betting after recording a superior handle during May. The Garden State took $318.9 million in sports wagers last month and held $15.5 million in revenue, whereas Nevada could only manage a $317.3 million handle and $11.6 million in revenue. It is just a year since New Jersey succeeded in its battle to axe PASPA, the federal ban that prevented all states apart from Nevada from legalising sports betting. It has now landed a symbolic victory over the Silver State and it will fancy its chances of pulling away in future.
New Jersey released its May revenue report a couple of weeks ago and Gov. Phil Murphy declared: “New Jersey – yes, New Jersey – can very soon and will very soon dethrone Nevada as the sports gaming capital of America.” He did not have to wait long for that prophecy to prove correct, as Nevada has just delivered its own May revenue report and it could not match New Jersey’s performance. It marks the first time in US history that Nevada has not been top of the sports betting pile.
This day was always likely to come, as New Jersey has more than twice as many residents as Nevada. Las Vegas remains a gambling hub for tourists, but New Jersey has Atlantic City and it has a much larger base of sports fans to target. Nevada may benefit from neighbouring Californians visiting Vegas, but New Jersey has profited from New Yorkers crossing the state line to wager at the Meadowlands and other sportsbooks.
A Robust May Performance
It was not even a poor performance from Nevada. In 2018 it saw its strongest May handle ever as bets topped $315.5 million, and it improved on that figure this time around. However, it was not enough to see off New Jersey. Nevada officials may be disappointed to see New Jersey soar into the lead, but they should be pleased with a robust May performance. However, bettors proved reasonably savvy in the Silver State, leaving operators with a hold of just 3.5%. Baseball was their saving grace, as they brought in $7.2 million on 4.1% hold on MLB. That offset a loss on football during the month.
New Jersey sportsbooks have now taken more than $3 billion in wagers since the industry began in June 2018. Online is dominant in the Garden State, accounting for more than 85% of sports bets, and FanDuel and DraftKings have emerged as the clear market leaders. “While we all knew it would be successful, I don’t think anyone expected how quickly New Jersey would come to dominate the growth in the market in the year since our sports betting law took effect, or how advantageously New Jersey would be positioned to dominate the entire marketplace,” said Murphy.
Pennsylvania’s Online Market Heats Up
Neighbouring Pennsylvania is larger in terms of population and it has seven major sports franchises, so it should be rivalling New Jersey for the crown. However, a lack of online sports wagering has held it back and its handle and revenue figures thus far have been paltry compared to those seen in the Garden State. Yet that should change in the near future, as SugarHouse launched online last month and now the Kambi-powered Parx sportsbook has joined the party. It entered a three-day testing period on Monday and officially went live on Thursday. That will be too late to have a huge impact on June’s figures, but it will be fascinating to see how the Pennsylvania industry performs in July now that there are multiple apps competing with one another.
A BetRivers site has also just gone live, taking the total to three. However, SugarHouse and Rivers are part of the same group, so the SugarHouse app may be axed, as the brick and mortar SugarHouse casino are being rebranded as Rivers. Kambi powers all three sites, so the lines and markets will be very similar. The main differences will be the bonuses and promotions offered. Things will get more interesting for Pennsylvania bettors once FanDuel and DraftKings launch in the Keystone State.
A Merger of Giants
The big news this week saw Caesars Entertainment agree to purchase Eldorado Resorts in a deal valued at $17.3 billion. It will make Caesars the largest casino operator in the US, with 60 properties spread across 14 states. The deal is expected to be completed next year and it should have a significant impact on the sports betting industry. Caesars has already teamed up with DraftKings in an agreement that will see a number of DraftKings branded sportsbooks launch at its casinos across the US.
Yet Eldorado has an agreement in place with William Hill, which operates the sportsbooks at eight of its casinos in Nevada, New Jersey and West Virginia.
Eldorado has purchased a 20% stake in William Hill’s US business in order to solidify the partnership. William Hill and Caesars held talks about a huge merger last year, but negotiations broke down. It will be fascinating to see whether the new and enlarged Caesars group persists with DraftKings or turns to William Hill as its sportsbook partner.
Sports Betting Coming to Chicago
Elsewhere, Gov. J.B Pritzker signed SB 690 into law this week, making Illinois the latest state to legalize sports betting. It will also make Chicago the largest city in America with regulated sportsbooks operating, and Illinois could be vying for New Jersey’s crown in the not too distant future. It is the sixth largest state by population, just behind Pennsylvania, but it has a passionate base of sports fans and it could attract bettors from neighbouring Midwest states.
The new law will see six casinos built immediately and by 2021 Illinois should have 16 casinos, five racetrack-casino hybrids, 5,000 lottery kiosks, video slots at airports and brick and mortar sportsbooks across the state, plus plenty of online sportsbooks. DraftKings and FanDuel are barred from entry for the first 18 months as a result of their history of running daily fantasy sports in the state when it was technically illegal. The big Illinois casinos will attempt to win over millions of loyal customers in that time and then desperately try to cling onto them when FanDuel and DraftKings make their delayed arrivals.