Is New Jersey on the path to overtaking Nevada as the king of legal sports betting in the USA?
Goals are important. We all have them, both personal and professional. We set them to give us something to strive for; something we can work towards that will help keep us focused and on task.
After leading the charge to get the power to legalize betting on sports into the hands of the states, the powerbrokers in the State of New Jersey probably had some goals for the new in-state gambling industry. What they may have been is anyone’s guess, but what they are now is clear.
New Jersey Governor Phil Murphy thinks the industry in his state will rival that of Nevada within a couple years. In a recent speech at the Meadowlands, he talked about the success the state has seen and the incredible growth the industry has experienced:
“In one year, we’ve gone from zero to 60 percent of the total handle in Nevada sports books, a state that had a 70-year head start. And yes, they can hear our footsteps. In other words, New Jersey sports book is a horse that can run and close and win….”
In the year since New Jersey has legalized betting on sports, the state’s sportsbooks have taken nearly $3 billion in wagers; Nevada did $5 billion. But New Jersey has been in the news recently for another reason. During May, New Jersey sportsbooks handled more bets than those in Nevada, $318.4 million to $315.8 million.
To go from nothing to $3 billion in just over a year is an incredible rate of growth. Taking more wagers than Nevada is an impressive accomplishment for an industry still in the infancy stages. But could the New Jersey sports betting industry actually overtake Nevada year-over-year?
It is not hard to see why Governor Murphy thinks New Jersey could overtake Nevada in yearly betting handle. After all, topping Nevada in May can be viewed as proof that it is possible.
But Nevada has been the mecca of legal sports betting in the U.S. for years. Why would people stop going there and start going to New Jersey?
It isn’t so much that people will quit going to Nevada. It isn’t that more will choose to visit New Jersey when they feel like gambling, either. It’s the mobile market. New Jersey took in roughly 75 percent of its wagers online and likely benefitted from Pennsylvania dragging its feet breaking into the mobile market.
The Jersey market has certainly benefitted from the lack of options in the immediate area. Maryland, Connecticut, Vermont, Maine, Massachusetts, and Virginia have yet to approve any legislation. It is legal in West Virginia, but there are no online operators. New York only recently decided to let four upstate Indiana casinos begin taking bets (but nothing online yet).
So, with few options in the northeast part of the country, New Jersey has the market cornered, giving them the potential for insane growth in the years ahead.
Murphy talked about the potential for the industry in-state during his speech at the Meadowlands:
“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.”
Being one of the first to legalize sports betting outside of Nevada certainly gave New Jersey a boost as did the free publicity from the part the state played in getting the Supreme Court to act. But when there is no competition, it is easy to dominate the market.
In the years to come, there could be more states jumping on board. Each one that does legalize sports betting will likely have some sort of impact on New Jersey’s industry:
- New York will soon have physical sportsbooks at four casinos upstate and will likely continue to work on mobile-related legislation.
- Pennsylvania’s mobile sector is bound to grow.
- It has been legalized in Washington D.C. and New Hampshire.
- Virginia currently has three bills on the table.
- Massachusetts has several proposals on the table and the support of the Governor.
There is a good chance several states around New Jersey will eventually get involved. When they do the rate of progress in New Jersey will be impacted.
What About the Nevada Sports Betting Market?
While the growth in New Jersey is worth celebrating, the industry there has a long way to go before it really has a chance to catch Nevada—and Nevada’s handle is still growing! Last year they took in a record amount of $5 billion up from $4.87 billion in 2017.
That isn’t a significant percentage of growth from 2017 to 2018. However, it saw a more substantial jump from $4.51 billion in 2016 to $4.87 billion in 2017. But Nevada’s yearly handle has been setting a new record each year since 2010 when it was just $2.1 billion.
Besides, while New Jersey may have about three times as many residents (roughly nine million to three million), Las Vegas alone sees about 42 million tourists a year.
If Nevada can get a new mobile app regulation passed that will make it easier for people to bet online, Nevada’s growth is likely going to get even better. Unlike New Jersey, who’s growth will slow down as the states around it approve legislation, Nevada doesn’t have that problem.
California, Wyoming, Idaho, and Utah are not going to be legalizing it anytime soon. Oregon only recently did, and Arizona and Washington have legislation pending (which doesn’t necessarily mean anything will be passed soon).
There is no meaningful competition on the west coast to impact the handle in California, and there doesn’t appear to be any on the way. That means it will be even hard for New Jersey to ever catch Nevada. However, New Jersey’s $318 million month is a sign that anything can happen moving forward.