New Jersey Governor: State’s Sports Betting Market Will Top Nevada
New Jersey Governor Phil Murphy said he was proud the state had taken a lead role in a legal fight to overturn a federal sports betting ban and that sports betting and online gambling has revived the state’s horseracing and casino industries.
During opening remarks at the inaugural Betting on Sports America conference, held April 23-25 at the Garden State’s Meadowlands Exposition Center, Murphy said he was also proud his name was on the legal challenge—though started by former state Senator Ray Lesniak and former Governor Chris Christie—that eventually saw the U.S. Supreme Court overturn the federal Professional and Amateur Sports Protection Act. Murphy then signed the state’s sports betting law a month later.
“I made the trek to Monmouth Park to place the first legal bets in this state on June 14th,” Murphy said. “I may regret those first bets, but I don’t regret for one second the leadership that New Jersey provided during the legal challenge, nor the leadership we are providing today in the growth of the U.S. legal sports betting industry.”
Murphy’s bets were on Germany to win soccer’s World Cup and the New Jersey Devils to win the Stanley Cup.
Since sports betting in the state began in June 2018, more than $2 billion in total wagers have been made, pumping new life into the state’s racetracks and casinos. About 75 percent of those wagers have been made online. That’s made New Jersey the second-largest sports wagering market in the country behind Nevada. Murphy said New Jersey can “overtake it and its decades-long head start” as early as 2020.
Murphy denied that the state’s fight for legalization was just a tax grab; the state has brought in about $1.5 million in new tax revenues per month since the law was passed. Murphy said those revenues are welcome, but just a “drop in the proverbial bucket” for the state’s $38 billion budget.
“We are in the early days of what’s expected to be a multi-billion-dollar market, and that’s just the operators’ profits from hundreds of millions of dollars of bets,” he said. “We brought what was an underground, illegal industry into the light, where it can create and protect jobs in our racetracks, casinos, and tech sector.”
Murphy said the state is also working to be a tech center for online wagering in the country and the state has proposed several new incentive programs with an eye toward “partnering” with business to not only foster growth and create jobs, but to “help become a true part of a broader New Jersey family.”
“We’re going to leverage our built-in advantages to dominate the marketplace,” he said. “New Jersey is the place you want to be.”
In a panel session called “New Jersey—Land of Opportunity,” Lesniak said a “12-year battle” and eight court losses were worth the effort to bring legal sports betting to New Jersey. “If the odds were 5,000 to 1, I was determined,” he said, adding that it was clear PASPA violated the 10th amendment of the constitution by abridging states’ rights.
“My expectations were high and they were met,” said Lesniak, suggesting the casino industry needed an infusion of new blood to remain viable. “Young folks are not so much into casino gaming but sports betting and online,” he said.
On the same panel, Kresimir Spajic, senior VP of interactive for Hard Rock, said the global company is invested “for the long term” in sports betting. “In two to three years as more states open, it will scale,” he noted.
David Rebuck, director of the New Jersey Division of Gaming Enforcement, echoed the belief that online gaming and mobile sports bets will engage whole new generations of players who are “new to the market, a diversity of people who probably weren’t going down to the casinos in Atlantic City and certainly weren’t going to the racetrack. … NFL Sundays in New Jersey were dead before sports wagering.”
The conference drew 40-some technology provides, game suppliers and manufacturers from around the world, but 80 percent of the 1,500 delegates were from the U.S., said Andrew McCarron, managing director of London-based Sports Betting Community, which hosted the show.
“It’s nice to be embraced by the American community, since it’s our first event here,” he told Global Gaming Business. “There is so much to talk about when it comes to sports betting in the U.S.—in the past all the talk hit a wall with PASPA. Now that’s been broken through, and just this week I think three states have authorized sports betting. Hopefully the same kind of dynamic we have in Europe will be in your future here.”
He said plans are already in the works for a second show, which is scheduled to kick off Monday, April 13, 2020. “The word of mouth we’re getting right now hopefully will transfer to the rest of the industry,” said McCarron. “We expect next year we’ll grow even bigger.”
The conference also included an gala induction ceremony that added former Governor Christie, Monmouth Park operator Dennis Drazin and iconic Las Vegas bookmaker Art Manteris to the Sports Betting Hall of Fame.
In related news, a study by Eilers & Krejcik Gaming seeking to identify seven “types” of sports bettors and help sportsbooks expand their customer base was also highlighted at the conference.
Chris Grove, managing director of sports and emerging verticals for Eilers & Krejcik, said that understanding the current sports betting customer can provide opportunities to attract new bettors.
“There is no such thing as a monolithic sports-betting customer,” says the report. “In fact, there are an ever-increasing number of distinct customer personas with unique wants and needs when it comes to sports betting.”
The report highlights seven “types” of sports bettors:
• Sharps: Medium- to high stakes bettors at highest frequency, motivated mainly by profit; Sharps consider themselves professionals and win more than they lose; still, they can bring value to the sports book by attracting High Rollers and Would-be Pros.
• High Rollers: Highest-stakes bettors, with low to medium frequency, who bet for fun or ego; will gamble in other forms, most likely poker and table games; generally profitable to sports books; high-stakes betting make them valuable, but they are expensive to court.
• Would-be Pros: Low- to medium-stakes bettors at medium to high frequency; motivated by profit and lifestyle, but lack bankroll and dedication of a Sharp; will gamble in casino, preferring skill or edge-based casino games but willing to try chance-based game; generally profitable to sports book but likely to complain and require consistent promotions.
¶ Action Chasers: Medium-frequency, medium-stakes bettors who enjoy gambling in many forms, particularly action games such as craps; generally profitable to sports books with good cross-sell potential, but also higher risk of problem gambling.
• Superfans: Low-stakes bettors at low to medium frequency, primarily on favorite teams; generally profitable to sports book with limited cross-sell potential.
• Status Seekers: Low- to medium-stakes bettors at medium to high frequency; driven by public recognition, such as winning a bracket contest or touting wins on social media; generally profitable to sports book, with low cross-sell potential.
• Casual dabblers: Low-frequency, low-stakes bettors seeking novelty or going along with friends; profitable for sports book; although not likely to gamble otherwise, this group offers opportunity to cross-sell.
The study says about 15 million Americans are active sports bettors in current regulated markets and predicts the base will grow to 45 million in the next decade.
“This is not intended in any way to be the final book on what the American sports betting consumer population looks like,” Grove told CDC Gaming Reports. “It’s a starting point.”