New Jersey once had the biggest market in the sports betting industry. However, New York’s mobile sports wagering market has taken a significant effect on the Garden State’s market, as the monthly handle data shows.
How Did New Jersey Fare in August?
Before the Empire State’s market launched in January, New Jersey’s monthly handle data showed that at least 20 percent of the total handle were from those crossing state lines to place wagers. It seemed like New Jersey did well during the early portion of New York’s launch as the handle numbers were strong.
Nevertheless, it may not be the case anymore as the effect seems to be in full effect. Sportsbook operators in the Garden State registered a total handle of $546.8 million in the month of August.
When comparing the year-over-year figures, the handle noted a significant decline of 17.7 percent from last year. The industry as a whole benefited slightly from entering the month of August as the markets factored in the NFL preseason.
The summer slowdown is officially over as the NFL season is entering Week 3. The nine operators that conduct business in the Empire State brought in $872.2 million in August, and 59.5 percent higher than New Jersey.
New Jersey Failed to Keep Up with the National Trend
New Jersey was one of the states that failed to keep up with the national trend, as August 2021 was a way better month than August 2022. Montana was the only other state to join the Garden State in that category.
Pennsylvania trended in the opposite direction when compared to New Jersey. After dipping in June, the handle increased in July and August.
The overall handle in August just noted a slight increase of 2.8 percent from July’s $531.9 million. This was the lowest total since July 2020. This was when sports was making a comeback after every major sport league was shut down due to the height of the global pandemic.
Bookmakers in the Garden State combined for a hold rate of 11.9 percent last month which was the first time since 2018 where the state crossed that threshold. Out of the total handle, $15.6 million were placed on futures bets that most likely revolved around the NFL.
Taking out the assumed $15.6 million in futures would drop revenue to $49.7 million for a 9.1 percent, which is about two percent higher than the national average hold rate.
Despite this, New Jersey has been unable to compete with New York’s sports betting market. New Jersey also has a low barrier to entry which allows a plethora of sportsbooks to enter the state. The state also has a low tax rate when compared to neighboring states.
Looking at the Overall Revenue Numbers
New Jersey has a major effect on the sports betting industry as thanks to the state push to get the industry started. The jurisdiction has reached the $2 billion handle mark since the post-PASPA era.
The state will have to look forward to a better September and quarter. The state will have a tough task ahead.