If the revenue generated from online sports betting in New Jersey is any indication of how much money can be made in other states, expect the adoption of the game to happen rapidly across the country.
In just their second month, online sportsbooks generated $12.6 million in revenue in the Garden State, according to figures released by the New Jersey Division of Gaming Enforcement (DGE). To put that number into perspective, consider that through three quarters of the year, online poker has only produced $16.4 million. It even took the highly successful online casino market more than two years to reach that level of monthly revenue.
In total, sports betting (land-based and over the internet) has generated more than $40 million in revenue since the US Supreme Court effectively reversed the 1992 Professional and Amateur Sports Protection Act (PASPA) in May. Casinos and racetracks in New Jersey began taking sports bets the following month, and the first online sports bets were taken in August.
From August to September, the number of licensed gaming operators that offered online sports betting doubled, and revenue from the online wagers eclipsed those from its land-based counterpart. Total sports betting revenue grew over that period from $9.1 million in August to nearly $24 million last month, with internet-based wagers accounting for 53% of the total sports betting market.
In addition to the sports betting operators, the state is also faring well with the amount of tax revenue that it is collecting. Revenue from sports wagers placed online are taxed at 13% compared to the 8.5% tax rate levied on revenue generated from sports bets placed in the casinos or at racetracks.
In total, the state earned almost $1 million in tax revenue from land-based sports bets and more than $1.6 million from online sports bets last month, the latter of which is approximately $25,000 greater than all of the revenue generated from online poker—not just the tax revenue—over the same period.
September’s online sports betting figures saw a big boost from August with total revenue rising 69%. The increase is a factor of the continued ramp up of the market combined with the start of the National Football League season. October figures could continue the growth trend as both the National Hockey league and the National Basketball Association kicked off their 2018-19 seasons this month.
So far, there are nine authorized online sports betting sites in the state, many of which are just starting to build momentum. Of those nine, the majority of the revenue generated came from the licensed sites under the Resorts license (BetStars and DraftKings) and under the Meadowlands license (FanDuel).
These sites generated 90% of the total online sports betting revenue reported last month. While the popularity of the daily fantasy sports brands and PokerStars new sports betting platform is only expected to grow further, other operators should see greater returns in the coming months as well.
Those states that have been waiting on the sidelines to see how well New Jersey and other states that were early adopters fared, likely have no reason to wait any longer before devising a plan to plugh budget shortfalls with revenue from online sports betting.