October was a record-setting month for New Jersey online gambling sites. Not surprisingly, the latest revenue reports issued by the New Jersey Division of Gaming Enforcement had a lot of eye-catching numbers.
Here are a few examples:
- Sports betting and online gambling both set new revenue records, combining for over $90 million.
- Sports betting handle was nearly $500 million for the month. That’s a monster number for a state with a population of around 9 million – thank you, New York City!
- And then there was total gaming revenue. As seen below, at nearly $300 million, it was the state’s highest total in October since 2009.
But those are only the surface numbers. There’s a lot more to dissect when we peel back a couple of layers of the monthly gaming reports.
Land-Based Revenue Unaffected by Online Growth
New Jersey has pretty much debunked the cannibalization arguments that have stalled the spread of online gambling across the country.
Despite sports betting and online casino growing by 69% and nearly 300% respectively in October, land-based casino revenue ticked up .8% year-over-year.
Thus far, online gambling and sports betting have been purely additive to the New Jersey gambling market. And as the chart in the opening shows, the industry is on track to reach its pre-2008-recession levels.
Online Outperforms Land-Based Revenue at One Casino
The possibility of an Atlantic City casino producing more revenue online than on its floor has been on the industry’s radar for several months, but it finally happened in October. A casino, Golden Nugget, produced more revenue via online gaming than retail gaming.
October gaming revenue at Golden Nugget AC:
- Land-based revenue – $14,751,895
- Online gambling revenue – $16,625,086
Sports Betting Beats Online Casino for the First Time
It was close, and there was at least one mitigating factor (see the next header for details on that), but sports betting revenue eclipsed online casino revenue for the first time in the Garden State.
- Sports betting- $46,393,537
- Online casino/poker – $45,214,555
That said, when retail sports betting is removed, online casino outperforms online sports betting.
- Online casino/poker revenue – $45,214,555
- Online sports betting revenue – $38,704,731
The Mattress Mack Effect
Jim “Mattress Mack” McIngvale isn’t the only businessman that runs promotions offering customers full refunds on their purchases if x sporting event happens, but he’s the first (to my knowledge) to eschew traditional insurance on these types of promotions and hedge his potential losses by placing sports wagers on the opposite outcome.
With most books averse to seven- and eight-figure liabilities, Mattress Mack had to spread his money around (which also served as a great PR campaign). And with legal sports betting options limited in the US, Mattress Mack eventually made his way to New Jersey, where he reportedly placed about $5 million in wagers.
That means New Jersey sports betting revenue was juiced by about $5 million of Mattress Mack losses. If we remove Mattress Mack from the equation, the handle numbers barely change, but revenue decreases by nearly 11%, and hold percentage drops nearly 1%.
And to complete the thought experiment, if the Astros prevailed and Mattress Mack beat the NJ sportsbooks for $5 million, the revenue numbers would have looked something like this.