In May 2019, New Jersey’s gaming industry celebrated becoming the largest home for sports betting in the United States, surpassing Nevada by $1.5 million ($318.9 million vs. $317.4 million). The State has continued to see incredible growth, shattering its own revenue records. For the past two years, New Jersey has been the top sports betting market in the U.S., bringing in $815 million in total in revenue in 2021. In January 2022, New Jersey collected over $1.3 billion in wagers, resulting in over $60 million in revenue. Why and how has sports betting become so successful in New Jersey? Choose New Jersey takes a look at the sector’s rise, as well as why it’s likely to keep growing.
New Jersey’s Journey to Sports Betting Leader
In 1992, the United States Congress passed the Professional and Amateur Sports Protection Act of 1992 (PASPA), banning all betting placed on sports competitions nationwide. In 2011, New Jersey set out to change this, starting with a (nonbinding) statewide referendum passed by voters and followed by the enactment of state law in 2012 to allow sports betting at New Jersey racetracks and Atlantic City casinos.
Official legal challenges to the constitutionality of PASPA would begin in 2013, and in June of 2017, the U.S. Supreme Court announced that they would hear New Jersey’s case directly related to sports betting. The case was finally heard in May of 2018, where the Supreme Court sided with New Jersey and declared that PASPA was unconstitutional. By mid-June, William Hill became the first to offer sports betting with the Monmouth Park Sports Book. Multiple companies such as FanDuel and DraftKings were quick to set up their own sportsbooks as well as mobile app access.
The first year of legalized sports betting was a notable success, bringing in $2.9 billion in sports bets and approximately $200 million in revenue for the sportsbooks. DraftKings reported 20 million bets and paid out $600 million during this first year.
Why is New Jersey Successful in Sports Betting?
The month after exceeding Las Vegas for sports betting, New Jersey calculated sports betting earnings that were double what was originally projected by State Treasurer Elizabeth Muoio in June of 2018 as reported by The New York Times. At the root of the success were a few different factors.
Established Gaming Regulations
New Jersey was able, in part, to have its very first sportsbook open rapidly after legislation passed due to the regulatory framework that was already in place. The New Jersey Division of Gaming Enforcement (NJDGE) was established in 1977 to help regulate gambling at New Jersey’s casinos and racetracks. For sports betting, both in-person and online, New Jersey’s legislative efforts to support the industry began in 2010.
The combination of built-in oversight and advance preparation enabled New Jersey and sports betting companies to get up and running within days of legislation passing. It also enabled the quick adoption of mobile app betting, which accrues the largest share of bets. The first online sportsbook launched within two months of legalization.
As with many B2C industries, New Jersey’s prime location between two major markets – New York City and Philadelphia – creates an excellent environment for sports betting. DraftKings’ four top mobile betting locations in New Jersey’s first year were all 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 practice facility of the NBA Philadelphia 76ers.
Due to New Jersey’s history within the gaming industry, casinos and racetracks were already built out at the time of legalization. This made it easy to designate and organize brick and mortar locations. Equally important is New Jersey’s investment in tech infrastructure designed for the 21st century:
- #1 ranked state for broadband access
- 68% of residents have excess 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, which relies on up-to-date information and financial processing akin to Wall Street. New Jersey has already established itself as a home for data exchange, as financial institutions like the New York Stock Exchange (NYSE) and the Federal Reserve Bank of New York already run transactions through Northern New Jersey data centers.
Part of what helped the sports betting industry grow so rapidly within the State was the ability to find readily available talent. There are 15,000+ financial services establishments within New Jersey employing over 222,000 workers. The New York/New Jersey region is considered the #2 hub for fintech in the U.S. The region also ranks #2 for software and web developers and cybersecurity analysts.
In addition to the strong lineup of companies in the area, New Jersey’s leading colleges and universities are fueling the talent pipeline. New Jersey ranks second in the U.S. for highest concentration of STEM degrees awarded.
Sports Betting in New Jersey: Present & Future
New Jersey’s success in the sports betting industry continues to make history. Six billion dollars were wagered in New Jersey in 2020, shattering Nevada’s previous record by $600 million. In 2021, the State became the first to handle over $1 billion in bets during one month in September 2021. Of that amount, $918 million was placed online, and nearly $100 million was placed at nine casinos and three race tracks. New Jersey’s total handle for 2021 reached $10.9 billion and is poised to maintain its position as one of the top sports betting capitals in the U.S.
Sports Betting Companies in New Jersey:
In addition to the State’s established casinos and racetracks for retail betting, sports betting companies are equally attracted to New Jersey’s market for mobile bets. Many are taking wagers on New Jersey and opening new offices here, including:
FanDuel, the State’s most popular sportsbook, announced in July 2021 that it would be adding 100+ jobs to its New Jersey workforce by the end of the year. The company currently has operations in Jersey City, Cherry Hill, and East Rutherford. Amy Howe, President of FanDuel Group said, “[t]he decision to expand in New Jersey was an easy one, considering all the state has to offer for online gaming and sports wagering companies, including proximity to New York and Philadelphia, and a tech-savvy, highly educated talent pool.”
Peer-to-peer sports betting exchange Prophet opened up a headquarters in Hoboken, New Jersey in August 2021. The new location will house the company’s leadership and operational teams. According to Dean Sisun, CEO of Prophet, “New Jersey has solidified itself as the new home of sports betting in the USA, thus making it the natural place for us to have our headquarters.”
Sports Wagering Innovation at new jersey city university (NJCU)
New Jersey is already home to many higher education institutions leading financial and technological innovation. Universities such as Princeton University, Rutgers University, Stevens Institute of Technology, and New Jersey Institute of Technology (NJIT) are all home to academic and research programs that support the sports betting industry. New Jersey City University (NJCU) is taking things one step further, with the announcement of a memorandum of understanding (MOU) with the New Jersey Economic Development Authority (NJEDA) to create the Sports Wagering and Financial Technology Workforce Development and Innovation Center.
The Innovation Center will act as a connector between the sports betting industry, academia, and relevant State agencies to develop technology for both sports wagering and fintech. It will provide incubation opportunities, workforce development opportunities, support local development, and engage organizations promoting inclusion and diversity within the sector.
Let Choose New Jersey Help you Make the Right Bet
Choose New Jersey is a nonprofit economic development organization with a mission to help bring businesses to the State. Is your financial services or technology company looking to take advantage of the sports betting boom in New Jersey? Discuss your potential with our team and find out what opportunities await. All services from Choose New Jersey are free of charge.
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