FROM THE TOP

FROM THE TOP: BREAKING RECORDS

With New Jersey’s gaming figures for November demonstrating monumental sums, Tim Poole takes a closer look at the numbers consistently setting the bar in the Garden State.

It's no wonder operator 5Dimes wants to enter the regulated sports betting market after years of offshore activity. Just look at the results being produced in New Jersey on a monthly basis, where a new record is broken with seemingly every new financial report. Back in September, black market brand 5Dimes reached a $46.8m settlement with the US Government, announcing its intentions to suspend US operations from 21 September and relaunch as a regulated sports wagering operator.

In a past issue of From the Top, we analysed the media’s role in not promoting offshore operators like 5Dimes, inspired by an open letter from American Gaming Association CEO Bill Miller. His main message was that if players are not educated about the nature of illegal operators, not only are players left at risk but there is less of an incentive for companies to follow the law. The media’s role is understandably an important one, especially when national outlets possess such a wide reach.

But another huge incentive for any business is, of course, profit. And November’s gaming figures for New Jersey offered perhaps the single biggest reason any offshore operator should turn to the regulated market. Sure, total gaming revenue was down to $288.9m, but only by 6% year-on-year, remarkable in itself considering Atlantic City casinos are operating at a restricted capacity. Online gaming win was $91.8m, almost doubling, while sports betting revenue was 9% up to $50.6m. Retail casino win was down 35% to $146.6m, showing just

how much of the Garden State’s legwork is now being done 67%, generated $24.8m with FanDuel and Resorts Digital, by online wagering. which grew 60%, amassed $14.6m with DraftKings.

New Jersey is at a point when online gaming forms just under What more of an invitation could ambitious brands need than a third of revenue and sports betting (predominantly online) the evidence of FanDuel and DraftKings’ success – even when forms around 17%. For the year to date, New Jersey gaming’s all taxes and regulatory costs are added into the mix? For a long $2.57bn generated – most of it during a global pandemic – is time, betting analysts have promoted New Jersey as a shining 19% down. But online gaming revenue is up 101% to $870.9m, example of getting the legalization of online gaming and sports with sports betting revenue sitting at $332.1m, 23% up. And betting right. Never before have they been more vindicated, that’s without even mentioning New Jersey’s incredible sports however, even if this is something they might have all foreseen. betting handle, which is what really shows off the strength of Another question this raises is perhaps how many antiits regulated market. gambling policymakers can be swayed by such statistics?

In November, the Garden State very nearly saw $1bn in sports States that haven’t yet embraced sports betting (fewer these betting handle. In total, $931.6m was wagered on sports, with days) and online gaming (still plenty) might find themselves $872m of that coming digitally. feeling more persuaded during a For the year to date, $5.02bn has been bet on sport in New Jersey, “ONLINE GAMING global pandemic, when they see just how much legal business is and again it’s worth emphasizing WIN FOR NOVEMBER being conducted in New Jersey. this is in a year when a large share of sporting events were either WAS $91.8M, ALMOST Other states, too, are seeing soaring numbers, although New postponed or cancelled. So why DOUBLING, WHILE Jersey’s regulatory mix – tax rate, wouldn’t an offshore operator like 5Dimes be tempted into the SPORTS BETTING convergence between land-based and online, support from the regulated market when faced with REVENUE WAS $50.6M. New Jersey Division of Gaming a proposition like that? Crucially, these are numbers that will only RETAIL CASINO WIN Enforcement – have made it the poster child of regulated US gaming grow with time. WAS DOWN 35% TO since PASPA was overturned. While the illegal market is still taking the majority share in the US, $146.6M, SHOWING Perhaps the biggest indicator of a turning tide is in neighbouring it’s also clear New Jersey is getting something right as it sets the bar so high. As we’ll explore in our cover JUST HOW MUCH OF THE GARDEN STATE’S New York, where Governor Andrew Cuomo recently spoke of sports betting in a more positive light than features this issue, it’s a model other states can follow. Analysts LEGWORK IS NOW ever before. Kambi CEO Kristian Nylén once told Gaming America have long championed the theory BEING DONE BY it was only a matter of time before behind New Jersey’s fair tax rate and gaming framework. Now, though, ONLINE WAGERING.” mobile sports wagering landed in New York. That moment has the numerical evidence backing up still yet to arrive, with consistent that theory is unequivocal, especially opposition from lawmakers and the tax dollars collected during a time when any government namely Cuomo himself. And yet, with a torrid 2020 almost would grasp new sources of revenue with both hands. over, Cuomo uttered the words “how about sports betting?”

Assessing individual properties, Fantini Research data shows when exploring how to create $15bn in revenue to shore up that each Atlantic City online offering saw huge yearly uptake. a widening deficit. Hard Rock and Borgata rose almost 200%, Resorts Digital was Naturally, this was far from a green light for lawmakers or up 91%, Caesars and Ocean grew more than 70%, Tropicana sports betting campaigners. But from one of mobile wagering’s 66% and Golden Nugget, generating the highest total, 37%. biggest opponents? It was significant. State governments That revenue is incredibly timely when you consider all but considering legalization of online gaming and sports betting one legacy casino saw table hold fall (only Hard Rock saw a 19% may still be unsure when it comes to responsible gambling, and rise). Sports betting wise, all but three brands saw yearly growth: that in itself is a whole new conversation. Thanks to New Jersey, Resorts, Bally’s and Hard Rock. Yet these three all dealt with six- though, they will be convinced of the pastime’s popularity, its figure totals, so high percentage falls constituted small actual tax-generating potential and that a fair regulatory framework is totals. Elsewhere, Borgata generated a 5% growth and everyone far more effective than a restrictive one. Records will continue else enjoyed a double-digit increase. Meadowlands, which grew to be broken.