New Jersey’s progress in securing a thriving sports betting market has been nothing short of prodigious, as the Garden State’s monthly revenue figures clearly show. Even taking into account the impact of the COVID pandemic, it has sustained an impressive market lead that shows little sign of slipping to its nearest competitors.
With a view to gaining a better insight to the New Jersey sector and its climb to success, SBC Americas spoke with Jake Williams, Vice President Legal & Regulatory Affairs at Sportradar. He believes the state has plenty more left in the tank and the right regulatory framework to stay competitive for some considerable time.
Starting with marketing, New Jersey sportsbooks are often cited as being highly aggressive when it comes to sign up bonuses. We asked Williams for his view on the sustainability or otherwise of that approach. “Despite the significant evolution of regulated sports betting since the repeal of PASPA in 2018, the industry is still in the early stages of US expansion,” he responded.
“It is difficult to imagine New Jersey operators slowing down their customer acquisition efforts, especially as neighboring New Yorkers continue to rely on the Garden State for mobile bet offerings. New Jersey should remain one of the most competitive US markets for years to come because of the Department of Gaming Enforcement’s sensible approach to regulation and the available acquisition channels.
Given another record performance in September, it has been predicted by some observers that New Jersey has the potential to hit $1bn in monthly handle. Williams concurred that it is a possibility in some states with the right regulations in place, but warned that recent revenue totals had been distorted by an anomalous sporting calendar of late.
He said: “We have to be mindful of the abnormal sports schedule that COVID-19 led to this fall. In every other year, we won’t see NBA and NHL offerings like we saw this September. However, as we observe New Jersey creeping closer to the $1bn monthly handle mark, it is a strong possibility in large markets that permit mobile wagering once they launch and mature, such as Illinois, New York, California, Florida, and Texas, that they will eclipse the $1bn handle mark, especially if they follow a New Jersey style regulatory framework.”
Another key ingredient to record handle growth, he advised, is the ability to offer college wagers. “Any state considering a broad prohibition on these bet types should expect a reduction in monthly handle potential, which can reach a significant percentage of overall handle,” he observed. “Bettors of both college and professional sports will take their business offshore or to neighboring states if they cannot utilize a single platform for the various events they wager on.”
Talking about New Jersey’s regulatory framework, we asked Williams how it has managed so effectively to strike the balance between allowing the market to grow while ensuring that regulation remains effective and robust?
He answered: “Every state has its own distinct gaming landscape and policy priorities, but the New Jersey regulatory framework should be the model to follow wherever possible. As the industry standard, New Jersey from the very beginning placed an emphasis on combating offshore operators, strict enforcement mechanisms for all licensed entities, and ensuring operators have the framework to compete against one another.
“In order to channel as much wagering as possible underneath the purview of regulators, New Jersey had the foresight to implement common-sense tax rates and licensing fees, three skins per licensee, and remote registration for mobile wagers.”
These industry-friendly factors, according to Williams, have allowed the New Jersey market to flourish with more than $570m in operator gaming revenue since June 2018. “At a time when communities are facing drastic budget deficits and a shortage of sales tax revenue, New Jersey is proving to other states how online sports betting can provide a much needed economic boost at a critical moment,” he said.
More generally, we pressed Williams to cast a forward glance at how the market might shape up for sportsbooks across the US, especially in light of the return of major sports and the prospect of the likes of the World Series and Super Bowl.
“2021 should be a busy year with respect to mobile sports betting expansion,” he predicted. “Even before COVID-19, data was emerging in states with mature mobile markets that verified approximately 85% of all wagers took place via online channels. Bettors in today’s age, whether new or old, crave convenience and the economic lifeline of online industries is more important now than ever before.”
In conclusion, he added: “We also know that 2021 presents fewer political obstacles in a non-election year and statehouses that neared legislative victories in spring 2020 have significant motivation to continue their efforts when they reconvene in January. As policymakers learn more about the benefits of online betting and how to ensure as much gaming revenue as possible stays in-state, the gaming industry should expect US expansion to steer away from the traditional retail model and instead toward the modern digitized sportsbook.”
