In May 2019, the New Jersey gaming industry celebrated its status as the largest sports betting home in the US, surpassing Nevada by $1.5 million ($318.9 million vs. $317.4 million). The state continues to show incredible growth, breaking its own revenue records. For the past two years, New Jersey has been the leading US sports betting market, generating $815 million in total revenue in 2021. In January 2022, New Jersey raised over $1.3 billion in staking, resulting in over $60 million in revenue. . Why and how did sports betting become so successful in New Jersey? Select New Jersey considers the sector’s growth and also why it is likely to continue to grow.
NEW JERSEY’S JOURNEY TO LEADER IN SPORTS BETTING
In 1992, the US Congress passed the Professional and Amateur Sports Protection Act of 1992 (PASPA), banning all sports betting across the country. In 2011, New Jersey set out to change this, starting with a (non-binding) statewide referendum by voters, followed by the passage of a state law in 2012 allowing sports betting at New Jersey racetracks and Atlantic casinos. -City.
Formal legal challenges to the constitutionality of PASPA will begin in 2013, and in June 2017 the U.S. Supreme Court announced that it would hear a New Jersey case directly related to sports betting. The case was eventually heard in May 2018 when the Supreme Court sided with New Jersey and declared PASPA unconstitutional. By mid-June, William Hill became the first to offer sports betting with the Monmouth Park Sportsbook. Several companies such as FanDuel and DraftKings quickly created their own betting shops as well as mobile app access.
The first year of sports betting legalization was a notable success, bringing in $2.9 billion in sports betting and about $200 million in revenue for bookmakers. DraftKings reported 20 million bets and a $600 million payout during its first year.
WHY IS NEW JERSEY SUCCESSFUL IN SPORTS BETTING?
A month after New Jersey surpassed Las Vegas in sports betting, he calculated that sports betting revenues were double the previous figure. originally designed by State Treasurer Elisabeth Muyo. in June 2018, according to the New York Times. Success was based on several different factors.
ESTABLISHED GAME RULES
Part of the reason New Jersey was able to open its first post-legislation bookmaker quickly was because of the regulatory framework already in place. The New Jersey Division of Gambling Enforcement (NJDGE) was created in 1977 to regulate gambling at casinos and racetracks in New Jersey. In terms of sports betting, both in-person and online, New Jersey’s legislative efforts to support the industry began in 2010.
A combination of built-in oversight and upfront preparation allowed New Jersey and sports betting companies to be up and running within days of the legislation being passed. It also allowed for rapid adoption of bets on mobile apps, which account for the largest share of bets. The first online bookmaker was launched within two months after legalization.
As with many B2C industries, New Jersey’s prime location between two major markets, New York and Philadelphia, creates a great environment for sports betting. The four main DraftKings bidding locations in its first year in New Jersey were located near New York City. New Jersey is home to six professional sports teams, including the NFL New York Giants and New York Jets, NHL New Jersey Devils, MLS New York Red Bulls, NWSL Gotham FC, and the NBA Philadelphia 76ers training ground.
Due to New Jersey’s history in the gaming industry, casinos and racetracks had already been built at the time of legalization. This made it easier to identify and organize the location of the brick and mortar. Equally important are New Jersey’s investments in technology infrastructure designed for the 21st century:
#1 state for broadband
68% of residents have access to fiber optic networks
Over 2.14 million square feet of data center space in northern New Jersey.
These are key factors for any online betting application that relies on up-to-date information and Wall Street-like financial processing. New Jersey has already established itself as a place to exchange data, with financial institutions such as the New York Stock Exchange (NYSE) and the Federal Reserve Bank of New York already transacting through Northern New Jersey data centers.
TALENTED WORK FORCE
Part of what helped the sports betting industry grow so quickly in the state was the ability to find readily available talent. There are 15,000+ Financial services institutions in New Jersey employ over 222,000 people. The New York/New Jersey region is counted as region #XNUMX. the U.S. fintech hub, the region also ranks #2 for software developers, web developers, and cybersecurity analysts.
In addition to the area’s strong lineup of companies, New Jersey’s top colleges and universities fuel a flood of talent. New Jersey has the second highest number of STEM degrees awarded in the US.
SPORTS BETTING IN NEW JERSEY: PRESENT AND FUTURE
New Jersey’s success in the sports betting industry continues to make history. Six billion dollars were delivered in New Jersey in 2020, beating Nevada’s previous record by $600 million. In 2021, the state became the first to process over $1 billion in bets in a single month in September 2021. Of this amount, $918 million was placed online, and nearly $100 million was placed at nine casinos and three racetracks. New Jersey’s 2021 total revenue has reached $10.9 billion and is poised to maintain its position as one of the largest sports betting capitals in the US.
BOOKMAKERS IN NEW JERSEY:
In addition to the state’s established casinos and racetracks for retail betting, sports betting companies are equally appealing to the New Jersey market for mobile betting. Many are betting on New Jersey and opening new offices here, including:
Sugarhouse HSP Gaming
FanDuel, the state’s most popular bookmaker, announced in July 2021 that it will add more than 100 jobs for its employees in New Jersey by the end of the year. The company currently operates in Jersey City, Cherry Hill and East Rutherford. Amy Howe, President of FanDuel Group, said: “The decision to expand in New Jersey was an easy one given everything the state has to offer for online gaming and sports betting companies, including proximity to New York and Philadelphia, as well as technical savvy, highly educated talent.”
Peer-to-peer sports betting exchange Prophet opened its headquarters in Hoboken, New Jersey in August 2021. The new location will house the company’s management and operating groups. According to Ding Sisun, CEO of Prophet, “New Jersey has established itself as the new home of US sports betting, making it a natural location for our headquarters.”
INNOVATION IN SPORTS BETTING AT NEW JERSEY CITY UNIVERSITY (NJCU)
New Jersey is already home to many institutions of higher learning leading the way in financial and technological innovation. Universities such as Princeton University, Rutgers University, Stevens Institute of Technology, and New Jersey Institute of Technology (NJIT) run academic and research programs that support the sports betting industry. The University of New Jersey City (NJCU) is taking it one step further by announcing a Memorandum of Understanding (MOU) with the New Jersey Economic Development Authority (NJEDA) to establish a Center for Human Development and Innovation for sports betting and fintech.
The Innovation Center will act as a link between the sports betting industry, academia and relevant government institutions to develop technologies for both sports betting and fintech. It will provide incubation opportunities, workforce development opportunities, support local development, and attract organizations that promote inclusion and diversity in the sector.