Sports betting in NJ rose sharply in July despite a few major league sports events. New Jersey bettors laid down their money on ultimate fighting, professional golf, and even Nathan’s Famous hot-dog eating contest, as an alternative during the delayed sports season.
Now that the major leagues have resumed play, there will certainly be big sports betting in NJ. According to Morgan Stanley analyst Thomas Allen, as the professional baseball season and professional basketball start at the end of July, NJ sportsbooks should see a big spike.
“New Jersey’s results probably benefit from a high level of promos, futures bets and free bets leading up to MLB’s and the NBA’s resumed seasons,” Allen said. “Volumes were strong for UFC, golf, and the Fourth of July Nathan’s Hot Dog Eating Contest.”
Sports Betting in NJ Up Significantly
The total amount of sports betting in NJ was up by 25% year-over-year in July. July saw $315 million in sports wagers, beating Allen’s calculation of a 30% decline. Furthermore, July sports betting in NJ was up 91% from June.
Over 90% of the sports betting in NJ is placed online, making the Garden State the biggest and most important online sports betting market in the country.
Strong Numbers in NJ Boost DraftKings Stock
The New Jersey sports betting numbers, as well as good results for online casino games like slots, blackjack, and roulette, appear to be lifting shares of DraftKings, which were up more than 4% to more than $35 recently.
Allen noted, “We highlighted DKNG as the biggest beneficiary of the strong online casino/sports betting results in New Jersey, due to it’s close to pure play in this market.”
DraftKings and FanDuel, which is owned by Flutter Entertainment in the U.K., lead the fiercely competitive online sports betting market in the US.
DraftKings will soon report its second-quarter financial results, and Allen boosted his estimate of DraftKings’s losses to $65 million from $50 million, because the company “appeared to use the loss of sports competition to attract new users.”
In June, DraftKings issued equity, indicating $70 million to $75 million in second-quarter revenue. However, that’s down from $113 million in the first quarter. Fortunately, Allen predicts third-quarter revenue for DraftKings of $128 million, up from his previous estimate of just $108 million.
The company guided its 2020 revenue to $540 million during its investor day earlier in the year. Allen projects DraftKings will earn $500 million in revenue.
Peaking at close to $45 in June, DraftKings stock is now under pressure. One concern is the college football season, with the Pacific 12 and the Big Ten conferences canceling their fall season.
DraftKings Future Looks Bright
Investors will be happy to hear what DraftKing’s chief executive, Jason Robins, has to say concerning the company’s outlook for 2020 and 2021. DraftKings has guided to nearly $700 million in 2021 revenue. DraftKings is well valued relative to revenue, with its current market value of around $12 billion.
Sports betting revenue in New Jersey was $30 million in July, more than doubling Allen’s $12 million estimates. Moreover, revenue is up from $13 million this June and $18 million in July 2019. The win percentage, or the revenue NJ sports betting operators kept, was 9% in July.
Online casino revenue was also strong in July, climbing 123% year-over-year to more than $87 million. Overall, New Jersey’s online and mobile casino revenue is now at an annual rate of more than $1 billion.
The bottom line, sports betting in NJ is booming, with or without major league sports. Online casinos and sports betting in NJ should play a key role in the state’s economic recovery.