Almost one year on from the PASPA repeal, Sean Chaffin weighs the New Jersey sportsbooks against one another, and gives a full round-up on sports betting in other US statesAs the calendar rolls into spring, many Americans will have their eyes turned to the basketball court. March Madness and betting go hand-in-hand, and it’s estimated US bettors wagered $10bn on the tournament in 2018. From bracket pools to picking games, to futures wagering, the three-week basketball tournament attracts plenty of action. However, only 3% was expected to be wagered legally, according to the American Gaming Association.
That could change somewhat this year, as potentially more states legalize sports betting. New Jersey was the lynchpin in the battle to eliminate that ban, and has served as a catalyst in the new world of sports wagering in the US.
Currently, the state has 10 land-based sportsbooks and 13 mobile wagering options. With the betting windows open since last June, the state offers some insight into the industry. Within both the land-based and mobile sportsbooks, both live and mobile, three big players stand out - DraftKings, FanDuel, and William Hill. While other casinos and racetracks have sportsbook and mobile wagering partnerships, the amount wagered pales in comparison to these three.
New Jersey trends
In January, bettors wagered a record $385m in the state, with FanDuel and DraftKings leading the market with about $7m each through partnerships with Meadowlands Racetrack and Resorts Casino & Hotel respectively. The two properties also have partnerships with PointsBet and BetStars respectively, but 90-95% of that $7m comes from FanDuel and DraftKings, with a major percentage coming from mobile.
The only other significant player was William Hill, which has licenses with Monmouth Park, Ocean Resort and Tropicana Casino & Resort Atlantic City. Those three properties’ sportsbooks combined made about $3.3m, with about $2.5m coming from mobile. The other mobile operators didn’t crack $1m.
While there may be a trend towards larger companies making more of a dent in the market, it doesn’t mean all large players have found success. PokerStars is the largest online poker site in the world, but hasn’t fared well so far in New Jersey with BetStars.
Despite offering a seamless app in which players can bet on sports, casino and of course, poker, BetStars wasn’t among the leaders in January. The operator offers numerous promotions, including bet multipliers, free bets and even offered players a 100-1 Super Bowl futures wager for $5 on any team in the NFL. Considering its numbers are grouped with Resorts Casino’s other partner, DraftKings (which accounted for about 90% of that), that puts its take at about $700,000 or so.
That number would put the company in fourth. 888 is another major poker operator in the market and accounted for almost $500,000 through its partnership with Caesars Entertainment. Both PokerStars and 888 will be looking to grow and have name recognition to do that, but brand loyalty to DraftKings, FanDuel and William Hill might make that a difficult proposition.
Another interesting player is Borgata Hotel Casino & Spa. The property is a poker leader on the East Coast with a vast number of players, and it generated $677,000 in sports betting revenue in January. The property was the first Atlantic City casino to take a sports wager, but its small sportsbook has underwhelmed and its PlayMGM app doesn’t offer as much as others. However, MGM is currently building a new $11m sportsbook at the property, with hopes of growing the business both live and through mobile.
The PointsBet mobile sports betting app debuted in January. In February, the Australian company announced a new partnership with Topgolf to rebrand its bars as PointsBet bars. The partnership offers something a bit different for the market, where bettors can bet on mobile while taking in the action live at the Topgolf property.
“Our partnership with Topgolf is a perfect alignment of the sports and entertainment community,” PointsBet US CEO Johnny Aitken said. “The PointsBet-branded bar areas, with live game odds and the opportunity to unlock special offers and rewards for downloading the PointsBet mobile app, will be the essential hub for fans to experience new, one-of-a-kind VIP betting experiences.” Tropicana was also set to open a new William Hill book in March, just in time for March Madness. The new venue would give an even further boost to the book in the state, and a shot at gaining on FanDuel and DraftKings.
“Keep an eye on Tropicana Atlantic City,” says Bill Gelman, who covers New Jersey as the lead writer for NJGamblingSites.com. “It’s one of the top properties in Atlantic City, and this investment is just the latest example of its continued commitment to attract new customers. William Hill is one of the top names in sports betting, both in the US and Europe. There is no doubt William Hill is committed to New Jersey sports betting with other sportsbooks in place at Monmouth Park and Ocean Resort, along with a mobile app.”
Super Bowl Sunday offered a huge opportunity for sportsbooks within New Jersey. Numbers for February weren’t available at press time, but many in the industry expected it to surpass January’s total. Gelman was on hand at some of those establishments that weekend. He visited multiple Atlantic City sportsbooks and found the experience more enjoyable at the DraftKings sportsbook at Resorts and the William Hill sportsbook at Ocean Resort Casino.
So far, New Jersey residents have been receptive to the action, but Gelman notes the market still in flux as more properties get on board and open new facilities.
“I think it's too soon to judge,” Gelman says. “DraftKings, FanDuel, and William Hill offer larger facilities with better amenities. But Borgata is building a permanent sportsbook, and we are still waiting to see what Hard Rock does with its space. The property is accepting sports bets, but the actual sportsbook space is still under construction.”
Those three leaders have found success in both live wagering and online. DraftKings and FanDuel have been able to parlay name recognition from years as the leaders in daily fantasy sports. Many in that player pool seemed to have shifted to the companies’ sports wagering offerings.
“From what I can tell, DraftKings and FanDuel stand out from the pack, not just in marketing, but promotional and bonus offers for mobile and online customers,” Gelman says.
A bettor’s perspective
A native of New Jersey, Professor Shine (who asked not to use his real name) is an investor and business owner in his 40s who regularly bets on sports and tweets about his gambling endeavors. Shine is serious about wagering and says the state’s sportsbooks still have some to go.
“Even the larger books have made a ton of mistakes, and lines are longer during peak betting times,” he says. “I was surprised the Super Bowl week wasn’t a big deal at a few places like Ocean or the Golden Nugget. The more well-known venues have been crowded and have had some training issues - not understanding a bet, for example. The experience has been sort of just okay.”
While there may be a few early leaders, Shine notes the Atlantic City Hard Rock opened its sports betting operation late, but has made great strides. As Atlantic City’s top revenue-producing casino, Borgata should see a huge rise in betting, Shine believes, after it opens its Vegas-style sportsbook, fitting the property’s reputation.
DraftKings and FanDuel have a had a few stumbles and William Hill has lowered some betting limits. Mobile betting has cannibalized live betting, because New Jersey doesn’t require bettors to open a mobile account in person. In January, mobile sports betting accounted for 79% of bets placed - a total of $304.97m.
While recreational and lower-limit bettors may have shifted their wagers to legal offerings within the state, the lower limits at the state’s books still are a hindrance to some bigger bettors. Despite that, the marketing efforts have been a boon to the industry and educated new bettors.
“Most larger bettors are still using offshore books due to higher limits, better prices and acceptance of bets,” Shine says. “New Jersey sportsbooks have smartly offered good promos for opening accounts – almost everyone has a decent promo.
A look at other states
While New Jersey wasn’t the first state outside Nevada to offer sports wagering (that honor goes to Delaware), it offers a glimpse into what may be in store for more populous states considering legalization like New York.
Sports wagering in tiny Delaware consists of books at Dover Downs Hotel & Casino, Delaware Park Casino, and Harrington Raceway & Casino. The state doesn’t have mobile wagering yet, but there are efforts underway to change that. Revenue peaked at $3.15m for September and dipped to $1.6m for January. The state lottery has also offered parlay betting at retail locations since 1976, which was made exempt from the federal ban. The lottery sports games took in $6.7m in 2018 - an increase of about 8%.
In West Virginia, the BetLucky app was the first mobile option to go live. A partnership is in place between Delaware North (operator of the Wheeling Island and Mardi Gras casinos) and Miomni Gaming. Miomni has worked with major casinos for online gaming, sports betting, horseracing wagering and fantasy sports.
However, DraftKings entered into an agreement with Hollywood Casino in December to partner for online and mobile. Its addition to the market could pose a challenge for smaller operators like BetLucky. DraftKings is now just awaiting regulatory approval to launch.
In Rhode Island, the state’s two casinos both now have William Hill books in place and in December generated revenue of $957,000 and $13m in handle. Legislators are already moving to add mobile sports betting and William Hill obviously may have an upper hand in taking bets.
Pennsylvania got in on the sports betting bandwagon in January, with four retail locations with mobile wagering set to debut in the first half of this year.
Mississippi doesn’t yet have mobile wagering and attempts to bring it online failed in February, when bills didn’t make it out of committee in the House and Senate. The state has a growing sports betting market. December was the state’s best month yet, with $6.2m in revenue on $41.8m in wagers. That dipped significantly in January to $2.8m revenue on $35.2m wagered.
The state has numerous casinos and several have already opened sportsbooks. DraftKings and FanDuel both have live venues in operation. If mobile wagering were legalized, there might be plenty of competition in the Magnolia State. William Hill has agreements with 11 properties, and MGM and Caesars own properties within the state. All three could easily have mobile wagering running in Mississippi. The state offers anther free market test case for mobile wagering. Many companies may have a foothold when mobile wagering is legalized.
Where the industry is headed may still be a bit of an open question, and much of what happens depends on individual state laws. It appears, as in New Jersey, Nevada, and soon Pennsylvania, that mobile betting is the future.
The question is not simply which states will legalize sports betting, but which ones will hold out. Legislators see an easy route to tax revenue from an activity that many Americans take part in anyway, and states have fallen like dominoes since the Supreme Court ruling.
The bigger players may have won the big money for now, but will the situation stay that way? That’s still an open bet.