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New Jersey Unable To Escape June Legal Sports Betting Downturn

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New Jersey Unable To Escape June Legal Sports Betting Downturn
A general view of the 15th tee box and Atlantic City skyline. Michael Cohen/Getty Images/AFP

New Jersey, by far the biggest and most successful legal sports betting market in the country proved Friday that even they are not immune to the seasonal slowdown being seen across the country. The New Jersey Division of Gaming Enforcement released their June figures late last week and they follow a pattern of slight handle dips over the 30-day period.

Like most jurisdictions that have reported so far, it isn’t all bad news for the New Jersey legal sports betting scene. While the overall handle saw a slight decrease, sportsbooks enjoyed a healthy rise in revenues from their sports betting activity. And with an increase in revenues comes a spike in tax contributions to the state.

“Overall, New Jersey continues to perform far better than every other sports betting market in the U.S.,” said Dustin Gouker, analyst for the PlayUSA.com Network, which includes PlayNJ.com. “No market can completely overcome a lack of betting inventory, but New Jersey’s sportsbooks continue to find ways to capitalize on what the sports world is offering, most notably the NBA Playoffs and baseball.”

Diving In

The Garden State’s status as the “King of the Bet-Friendly States” looks as though it will never be in danger, but their sports betting scene joined Indiana, Iowa, Oregon and Delaware this week as jurisdictions that saw an overall decrease in their sports betting activity.

New Jersey sportsbooks took in a total of $766.9 million in bets in June, which represents a 5.8% drop from June when $814.3 million was reported. June’s totals show just how crucial the NFL season is to the broader industry – a $996.3 million was recorded in a record-December, during the height of the NFL season.

It isn’t all bad news for the New Jersey scene, however. Sportsbook revenues climbed a healthy 34.7% month-to-month, to $71.3 million in June from $52.9 million in May. The spike can be traced to an unforeseen large jump in hold-rate for New Jersey casinos. That rate was 6.5% in May and climbed to 9.3% in June.

Thanks to the hold-rate spike, state and local tax coffers in New Jersey benefitted from a $10.9 million tax contribution from its state’s sports betting providers.

Mobile Slips, Retail Bounces Back

To nobody’s surprise, it was New Jersey’s mobile sports betting sector that led the way in terms of handle-generators. 89.1%, or $683 million of the $766.9 million that flowed into the state’s sportsbooks came via mobile apps. That’s a slight 7% drop from the amount mobile accounted for in May.

But the good news is the bounce back of the retail sector – one that is expected to keep progressing with the relaxation of COVID protocols and the impending return of Atlantic City as an East Coast tourist mecca. The Garden State’s retail sports betting sector contributed $83.9 million to the overall handle, an increase from the $79.7 million in May.

Basketball’s Dwindling Influence

Since March, New Jersey’s legal sports betting scene has been buoyed by basketball. The New Jersey Nets’ unfortunate departure from the NBA playoffs and the fact that there are fewer overall games to bet on has really affected New Jersey’s bottom sports betting line.

In fact, parlays drove the handle in June, not basketball. Parlays were responsible for $31 million of the overall handle with “Other sports” coming in second with $17.5 million.

Basketball contributed just $14.5 million, still tops among sports but a far cry from where they were in previous months. Baseball was responsible for an underwhelming $3.5 million in bets for June.

First-Half Numbers and What Could Happen In the Second Half

With June’s numbers in the books, it has allowed analysts to step back and marvel at what the Garden State has been able to accomplish with their legal sports betting platform in the first six months of 2021. Sportsbooks in the state have so far taken in over $4.9 billion in 2021, have earned $361 million in revenues and have achieved a 7.4% hold. Amazing.

The question that arises from a look back at the numbers from the first six months is – how high is the ceiling for the next six months for the New Jersey scene? While July and August are expected to produce unflattering numbers, they will be followed by four full months of bread-and-butter NFL action.

With the pigskin contribution and with some new blood rumored to be coming online in New Jersey in the form of the Sports Illustrated-branded app, expectations are sky-high for the Jersey industry.

Is a $10 billion 2021 total handle a reasonable ask? At this point it seems like an OK bet.