Things have moved fast over the last 48-hours as concern over the spread of the coronavirus forced the delay of the MLB, NBA and NHL seasons. The 2020 Masters golf tournament is also been postponed. Moreover, the NCAA Tournament, the biggest event for sports betting, was canceled altogether.
While sports fans and players alike are bitterly disappointed, it’s also a huge loss for New Jersey’s sports betting industry. New Jersey’s sportsbooks shut down indefinitely March 16, in response to the new federal and state restrictions on public gatherings. However, the sportsbooks are still accepting online bets.
Revenue takes a hit
In what was sure to be the two busiest times of the year for sports betting, the New Jersey industry is on hold until the COVID-19 pandemic is resolved. Sports betting revenue records have been climbing steadily, but until the coronavirus situation abates, all revenue is stopped.
$540 million was wagered on sports in the state during January proceeding Super Bowl LIV, and in the 21 months sports betting has been legal in the Garden State, the additional revenue has provided much-needed revenue to the horse racing industry at Monmouth Park and the Meadowlands. The sportsbooks and online betting at those sportsbooks generated more than $277 million in gross revenue.
Unfortunately, the Meadowlands has canceled its live harness racing, with no word about the future of racing at the track.
“The ripple effect on sports betting from the virus is profound, because it extends far beyond the sports betting bubble,” observed Daniel Wallach, a Florida lawyer specializing in the sports betting industry. “It’s just one factor of the broader impact across every section of American life, and it’s going to have a continuing impact. These are unprecedented times and the gaming industry is taking a big hit, as are many industries. There will be an immediate impact as well as a trickle-down impact over the months and years.”
How significant is the impact?
Last year was the first time gamblers in New Jersey were able to legally bet on the NCAA Tournament. During that first month, $372 million was wagered across the Garden State, raking in gross revenues of $31.7 million.
The Meadowlands, which partners with FanDuel to process its sports wagers, accounted for $17.5 million of revenue during the first month of legal sports betting; which included $13.3 bet online. Monmouth Park, partnered with William Hill, raked in $2.7 million.
However, the sports betting market has exploded dramatically in the Garden State over the past 12 months; in fact, New Jersey poses a serious challenge to Nevada when it comes to dominating the gambling industry.
By January, 2020, the $53.6 million in gross revenues for New Jersey’s sports betting industry represented more than a 185% increase year-over-year. With the sports gambling market continuing to grow, the handle may have exceeded the record of $562.7 million set in December, 2019, resulting in $32.9 million in gross revenue.
The numbers for New Jersey’s sportsbooks in February showed a 54.4% increase from the previous year, with $494.8 million in bets, compared with just $320.4 million in 2019.
“New Jersey’s year-over-year increase was impressive during February, but now, we’re in uncharted territory,” said Dustin Gouker, a leading industry analyst. “There are huge concerns with Covid-19, but the NBA is one of the main revenue sources for New Jersey’s sportsbooks. The suspension of the NBA season, in addition to suspensions of other leagues, will no doubt have a significant effect.”
Legal sports betting has swept across the nation since the 2018 decision by the U.S. Supreme Court striking down PASPA as unconstitutional. Sixteen states have since legalized sports betting, with all other states, except Idaho, Wisconsin, and Utah, having imminent or long-range plans to make sports betting legal. However, the No. 1 sports betting state remains Nevada.