New Jersey Sports Betting No Longer in Decline

And just like that, New Jersey sports betting is back on the rise.

At a time when legal sports betting in the United States is enjoying a boom in business, The Garden State is not having the same level of good fortune. On the contrary, their revenue has failed to register a year-over-year monthly increase for 12 consecutive reports. That is, until now.

The New Jersey Division of Gaming Enforcement just released their revenue figures from June 2023. According to the report, their sports betting handle hit $778.8 million, which represents a (marginal) increase over June 2022, when they took in $766.4 million of total wagers. Granted, this $12.4 million year-over-year uptick isn’t very large in the grand scheme. The June 2023 handle is roughly a 1.6 percent jump from June 2022. Other states routinely see much starker spikes when comparing monthly business to the same period in the prior year.

Still, this is nevertheless a pretty big win for sports betting in New Jersey. Per multiple outlets, The Garden State was embroiled in a stretch of 12 consecutive months of declining year-over-year handle, the longest streak in the state’s history. That in itself qualified as an eye-opening span of diminished returns. Previously, New Jersey’s longest stretch of decline lasted four months. Their most recent dip was three times as long.

Is this a cause for bigger-picture concern? Or is it perhaps being overblown? And regardless, why exactly was New Jersey sports gambling handle on the downswing for such an extended pocket of time?

New Jersey Sports Betting Feeling the Squeeze of Alternative Options in the Tri-State Area

Not long ago, The Garden State’s wagering options were unique to them. They welcomed the opportunity to legalize sports gambling in all its forms before most other states. Even as the USA warmed up to the industry, many places still preferred to approve in-person wagering alone. But New Jersey has allowed people to bet with the best online sportsbooks available in the United States for years. Thanks to Atlantic City’s gambling exception, in fact, the state has technically been offering some form of online gambling since 2013.

However, this setup is no longer especially unique. Roughly half of the United States now offers legal online sports betting. More critically, that group includes pretty much every state that borders New Jersey: Pennsylvania, Connecticut, Maryland, Delaware and, most notably, New York.

It is no surprise that New Jersey’s 12-month handle decline almost perfectly coincides with the legalization of sports betting in New York. The Empire State debuted sports gambling options back in January 2022. It has since become the most lucrative sports betting market in the United States. The state has revenue reports dating back 18 months. During this time, the New York monthly sports betting handle has averaged over $1.35 billion. And yes, that’s billion with a “b.”

Though it’s impossible to pinpoint just how much this has impacted New Jersey’s gambling business, the ramifications are no doubt massive. New York is The Garden State’s direct neighbor—a manageable drive away for pretty much everyone in The Empire State.

In previous years, New Yorkers’ routinely visited New Jersey to place bets on professional and college sports because they weren’t able to legally do so from their own homes. Much of that business is now gone. New Yorkers must still find out-of-state alternatives if they’re trying to bet on year-end awards props, because the state doesn’t allow those wagers. The Empire State has also yet to green light online casino options. But single-event and future outcomes are the biggest driver of sports wagers. New Yorkers no longer need New Jersey to capitalize on those opportunities.

Despite Decrease in Handle, New Jersey Sports Betting Revenue Remains on the Rise

On the surface, the loss of sports gambling business from New York feels like it should be a major concern for New Jersey. And perhaps it is. Immediately, though, New Jersey sports betting revenue actually remains on the rise.

According to Legal Sports Report, the state’s “total revenue through the first five months of the year is up more than $105 million compared to 2022, a 39 percent increase.” To call this an increase understates the rise. A 39 percent uptick is more like a boom.

But how is that “boom” possible when New Jersey is technically taking in less money per month? A few factors come into play. First and foremost, sports betting handles aren’t reflective of winning wagers the state’s gambling operators must pay out. Instead, “handles” simply represent the total amount of money bet. People in New Jersey could be losing their wagers at a higher rate than normal, which would allow the state to earn more money in taxes while taking in fewer bets.

What’s more, unlike other states, New Jersey doesn’t allow sportsbooks to deduct promotional wagers from their revenue reports. This is fairly unique relative to the rest of the market. Most states are newer to legal sports betting and have offered that incentive to online operators as a way to encourage lucrative sign-up bonuses. New Jersey doesn’t need to focus on building up their clientele base as aggressively, since online sports betting has been around the state for a while.

We will of course have to see whether these caveats can sustain New Jersey over the long term. They will suffer another hit if New York increases their catalog of props and/or legalizes online casino gaming. But for now at least, New Jersey sports betting doesn’t appear to be in dire straits, despite their record decline in handle.

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