New Jersey’s sports betting handle eclipsed $1 billion for the fourth consecutive month during a busy December.
Garden State sportsbooks handled $1.2 billion throughout the month, taking the annual handle to $10.9 billion. That is a sharp increase on the $6 billion that operators handled in 2020.
Revenue dipped to $59 million in December, which represents a 48.6% decrease on the record $114.8 million that New Jersey sportsbooks held during the previous month.
The hold plummeted from 9.1% in November to 4.8% in December, which is bad news for the sportsbooks, but good news for bettors.
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A Record-Breaking Year
That took annual revenue to $816 million for 2021. It represents a 104.7% increase compared to 2020 when sportsbooks in the state held onto $398.6 million.
The state earned $102.6 million in taxes from the sports betting industry in 2021, including $7.5 million in December.
Sports betting launched in 2018, when the state earned $11.5 million in taxes. That figure rose to $42.3 million the following year and then to $50.8 million in 2020.
Online sports betting accounted for almost 91% of the total handle for 2021, and 91.7% for December. The Meadowlands – which hosts FanDuel, PointsBet and Superbook – was the clear market leader with $30 million in revenue during December.
A strong December trading period cemented New Jersey’s status as the number one online sports betting jurisdiction in the country for 2021, leaving it comfortably ahead of Nevada, Illinois, Pennsylvania and Michigan. However, it is unlikely to hold onto that title for much longer.
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New York Presents a Challenge
Last Saturday, online sports betting got underway over the border in New York. That could prove detrimental to New Jersey’s burgeoning industry, as a significant chunk of its revenue came from New Yorkers, who would head into the Garden State to place bets on their phones.
They no longer need to, as BetRivers, Caesars Sportsbook, DraftKings and FanDuel all went live in the Empire State last Saturday. BetMGM will take the total to five when it launches on Monday, and four more operators are gearing up to launch.
Some people suspected that sportsbooks would launch paltry sign-up bonuses in New York in response to its demands for a $25 million licensing fee and a 51% cut of all sports betting revenue.
Operators in New York are not permitted to deduct promotional spend before paying the tax, as is the case in some other states, so it was feared that they would not be able to launch the sort of enticing deals they offer in New Jersey, which has significantly lower licensing fees and a far more favorable tax regime.
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Yet that has not come to pass. Caesars went in hard with a two-part welcome bonus in New York, including a $300 free bet and a 100% deposit match up to $3,000. That is far better than its offer in New Jersey. The other operators have invested heavily in sign-up bonuses too as they battle for market share, so there is no longer any incentive for New Yorkers to visit New Jersey to place their legal sports bets.
Last weekend, New York enjoyed a record-breaking launch. GeoComply revealed that there were 5.8 million geolocation pings – a requirement for online bettors to prove they are in a legal sports betting state – in New York during the first 12 hours.
In the same period of time, there were just 2.3 million pings in Pennsylvania and 2.1 million in New Jersey, suggesting that the Garden State’s reign could be coming to an end.