New Jersey Follows Trend of February Sports Betting Declines

It had been a remarkable string of record-handles for the US legal sports betting industry before an inevitable slowdown in February, when there was just 28 days, one less weekend, and only one NFL game to take advantage of. Numbers out of participating legal sports betting states have been coming in and all have shown a drop-off in not only the handle but also the revenues that accompany the amounts wagered.

The state of New Jersey, the undisputed "King of the Bet-Friendly States" is out with their February figures and they too showed a significant February drop. While still by far the most successful state in the nation with regards to its sports betting platform, New Jersey, which had approached the $1 billion mark in the previous three months generated only three-quarters of that in February en route to their worst month since August.

Analysts aren’t worried however. “Even with a slowdown in February, which was expected, New Jersey remains the most fertile online sports betting and online gaming market in the U.S.,” said Dustin Gouker lead analyst for PlayNJ.com. “February’s results are a reminder, though, that New Jersey’s market is not destined for infinite growth."

A Deeper Dive

New Jersey, prior to February enjoyed three straight months of $900 million+ handles. That streak came crashing down last month thanks to a $743 million handle - a whopping $215.7 million or 22.5% less than January's $958.7 million that came into New Jersey sportsbooks. While slightly concerning, the $743 million represents the fourth-best month that New Jersey has had and is miles ahead of the best month any other jurisdiction has ever had.

Sports betting revenue dropped 44.1% to $46.2 million, from January's $82.6 million with $5.7 million tax dollars being generated for state and local coffers.

Unsurprisingly, it was New Jersey’s mobile apps that led the way, producing $689.2 million of the $743 million handle. While that number is down 22.3% from January's $886.7 million, it is still a 92.8% share of New Jersey's sports betting market in February and a slight 0.3% bump from January.

Silver Lining

There is a silver lining in New Jersey's February sports betting totals. The numbers show a huge year-over-year increase in the overall sports betting numbers.

The February 2021 handle of $743 million is 50.1% higher than the totals from February 2020 when $494.8 million was taken in by New Jersey sportsbooks. Sports betting revenues also showed incredible growth, jumping from $17 million in February 2020 to $46.2 million last month, an incredible 171.8% spike year-over-year.

Online contributions to the overall handle also climbed over the 365 days. Mobile apps were responsible for $436.5 million in February 2020, 57.9% less than the $689.2 million they generated last month.

So, while a slump ensued, it is not expected to be long-lasting and New Jersey's status as the Top-Betting Dog in the nation doesn't seem to be under threat.

“As of right now, New Jersey is playing on a different level than any other state,” said Eric Ramsey, analyst for PlayNJ.com. “That could be particularly apparent in March. March Madness is the largest sports betting holiday of the year, and in New Jersey, basketball in general tends to draw a lot of action. In other words, it’s possible New Jersey could become the nation’s first state to generate more than $1 billion in sports bets in a single month.”

Potential Threat?

A new wrinkle could soon find its way to New Jersey and effect their monthly handles. That wrinkle comes in the form of an expanded New York legal sports betting platform that could be coming sooner rather than later.

It is estimated that New York bettors make up 25% of New Jersey's monthly handles and with New York threatening to modernize their antiquated retail-only platform, New Jersey may feel the pain.

"For the first time since Pennsylvania launched, New Jersey could face increased competition. This time it’s from New York, its main feeder market, which is pushing ahead on legalization efforts. While that is cause for concern in New Jersey, the state’s online sportsbooks and casinos have positioned themselves as a giant in the industry, able to withstand neighborly competition” said Dustin Gouker.

Crystal Ball Time

It was only a month ago at this time that analysts and insiders were talking about a $1 billion monthly handle for New Jersey. That may still be a possibility, as early as this month.

With March Madness ready to take over the betting landscape across the nation and with New Jersey ready to absorb, once again, a slew of mobile bettors from New York, March could just be the month when The Garden State could set a new standard - one that all other participating legal sports betting states can only dream of.

A bounce back is imminent after the short one-month February sports betting handle hiccup. Most are betting on March being New Jersey's biggest betting month yet.