Once sports betting was legalized in New Jersey, there were always going to be more states to follow. With the numbers coming out of the Garden State, the legal landscape for sports betting and the entities associated with it is sure to change gambling in the United States.
PASPA Ended by Garden State
The Professional and Amateur Sports Protection Act of 1992, better known as PASPA, outlawed sports betting across the United States with the exception of a few states. Of course, we know that sports betting has always been legal in Las Vegas but there were also sports lotteries in Oregon, Delaware, and Montana that were exempted from PASPA.
In May 2018, a decision was made by the Supreme Court to overturn PASPA with New Jersey leading the charge. That decision is the reason the legal sportsbook industry is increasing in the United States. New Jersey generated over $22 million in tax money from sports betting within a year. They were also able to surpass $3 billion in the handle which represents 60% of Nevada’s handle. Those types of first-year numbers were just a preview of what was to come. In fact, Americans already expend around $150 billion on betting and those are conservative numbers, 66% of that money is invested on only NFL bets, this can be seen when the best sportsbooks release lines, contests, and subscriptions bonuses on each new season of the NFL.
New Jersey Challenges Nevada
Once New Jersey got their foot in the door, they quickly showed that they are a force to be reckoned with in the legal sports gambling market. Before we get into the numbers, it is important to understand one geographical advantage that New Jersey has. Sports betting has also been legalized in New York, except mobile betting is still against the law. That is not the case in New Jersey where upwards of 80% of the bets taken there came from mobile. With Manhattan being so close to New Jersey, most New Yorkers just head across the state line, make their wager, and head home.
With that massive ace in their back pocket so to speak, in May of 2019, for the first time ever, Nevada finished number two in sports betting handle. With $318.9 million in the handle, New Jersey really made the rest of the country stand up and take notice.
Other States Soon Got in the Legal Sports Gambling Business
New Jersey might have done the biggest but they weren’t the first. The reason Delaware hasn’t been able to capitalize in terms of the handle like New Jersey, other than their much smaller population, are the rules in place. No mobile better plus the having the state lottery in charge has seen them lag way behind. Another 21 states would follow plus Washington D.C and enter the legal sports betting game.
Not every state operates the same as New Jersey because every state decides on the rules and regulations when it comes to betting. Of the 22 states that have voted to legalize betting, 7 have chosen to have all forms of betting at brick and mortar sportsbooks, 6 have full mobile betting and another 5 have partial mobile betting. The other 5 others (D.C is not a state so it’s 22 states plus the District of Columbia) have legalized but still have not officially taken a wager.
FanDuel and DraftKings Are Benefitting Big in New Jersey
Sports betting might not be the first thing people think about when they hear FanDuel and DraftKings in most of the country but in New Jersey, they are at the top of the mountain. Last year, FanDuel was the market leader in New Jersey with more than $149 million in revenue through its license at the Meadowlands Racetrack. DraftKings finished in second place with over $79 million in revenue through their license with Resorts Digital.
DraftKings did have the early lead when sports betting was first legalized in 2018 but that was mostly due to mobile betting. They were able to launch way ahead of the competition and it has been proven time and again that sportsbooks without mobile can’t compete with those that do. The same obviously goes for states that have been slow to legalize mobile as well as we pointed out with the example of New Yorkers flocking to Jersey to place their wagers.
The same phenomenon exists in Chicago where you can take a 45-minute free shuttle to a casino in southern Indiana to place legal wagers. Illinois has been very slow to launch legalized sports betting although talks are at an advanced stage. FanDuel and DraftKings will have their eye on those talks as they know that the opportunities that they’ve enjoyed in Jersey will be available in other states across the country as more and more local governments see how much tax revenue can be generated through legal sports bets. Even the states that would usually be against it have had their hand forced by the exodus of their own residents crossing state lines and spending their money out of town instead of at home. It’s just a matter of time before gambling is legal all across the nation.
