retail sportsbooks market

Retail Sportsbooks: An Important Piece Of The US Sports Betting Puzzle

There can be no doubting the alacrity with which US bettors have taken to expanded regulated sports betting in the US this year.

The bellwether in this regard is New Jersey, and by now we all know the figures: in October, sports gross revenues came in at $46.4m, four times the $11.7m from last year while in the year-to-date total revenues hit a princely $237m.

When it comes to sports betting, New Jersey has clearly struck gold. Indeed, as wrote earlier this week, the rapid expansion of legal US sports betting, and the eye-catching revenues generated, has caught people by surprise.

As we said of Pennsylvania and Indiana, currently only behind Nevada and New Jersey in terms of sports-betting revenues despite effectively having only just launched, the biggest growth area is online.

That is almost certainly true. Looking at the handle figures from New Jersey, 85.5% of the total was derived from online – mainly mobile – betting in October, while only 14.5% came from land-based betting. In the year-to-date, meanwhile, 17.4% of the total handle was land-based.

Both figures represent a hefty skew towards online sports betting and go some way to proving the claim that New Jersey, at least, is a straight-to-mobile market.

And yet. That land-based figure, overshadowed as it is by the mountainous online and mobile take-up, is still worth investigating.

Don’t Sleep on Retail Sports Betting

The handle percentage comes from just ten venues, eight of which are in casinos in Atlantic City with the remaining two are the racetracks of Monmouth Park and Meadowlands. Retail betting in New Jersey might not be hitting the headlines, but it is bringing in revenue.

Seth Schorr, chief executive at Fifth Street Gaming, says the popularity of retail betting where it is available is not surprising, suggesting it goes hand-in-hand with how the US sports fans consume their sport.

“Nevada has been creating exciting books for decades, and if you visit any of them on a Sunday during football season they are all packed,” he says. “Local casinos such as Stations/Red Rock are filled with locals who could easily be watching a game at home, but they enjoy the sportsbook experience. For some of these bettors, they still find it easier to bet at a window or kiosk, but most are coming for the social atmosphere and ambiance.”

Such was the subject of a session at G2E in October when the principles behind the refashioning and remodeling of the Caesars-run sportsbook experience at The Linq on the Las Vegas Strip pointed to how a “fan cave” could be created that would entice people to the property even if they didn’t want to bet. Such is the success of the project that sources suggest that ‘seats’ at the Linq sportsbook are selling at a premium on big sports days.

“While mobile wagering will continue to grow in all jurisdictions that allow it, the in-venue experience is still one that cannot be replicated at home or on the road,” says Schorr. “It is up to the bricks-and-mortar operators to create an experience that is more exciting and social than the one a bettor can have at home.”

Drive-in Saturdays (and Sundays)

One important factor in New Jersey that cannot be ignored is the extent to which land-based-betting at Meadowlands can be assumed to be a big draw for residents from New York state.

As Seth Young, chief information officer at PointsBet noted, Meadowlands was “single-handedly” responsible for $25m or 55% of the $46m total retail revenue in October, a pattern repeated throughout the year.

If mobile doesn’t come to New York or any other given state, then the punters will provide their own mobility and look elsewhere for their betting, whether that is across state lines or towards the online black market.

“There’s always going to be a place for retail, but the absence of mobile will just keep consumers in the black market,” says Young.

“It takes exponentially less time to access a black market betting site and place a bet than it does to drive from New York City to any of its commercial casinos. The same is often true for Atlantic City regarding most places in New Jersey. States that have more robust and convenient retail gaming options close to population centers – like Illinois, perhaps – may have a stronger retail market than others.”

As Young points out, the US retail betting landscape is unlikely to resemble the picture in Europe, with betting shops or corners on every street, but destination-style betting outlets could provide “innovation in its own right.” As with mobile and online, he goes on to suggest that the US will see “innovation and advancements… compared to what is currently available and deployed in the market.”

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