The New Jersey Division of Gaming Enforcement’s press release issued on Friday afternoon not only revealed the revenue numbers for June, but also served to conclude a four-year term of sports betting in the state (plus two weeks, as the first bets were taken on June 14, 2018, at Monmouth Park and Borgata).
The figures strongly suggest that 2022 will be a record-breaking year for betting handle. At the midway point of the year, NJ sportsbooks have taken $5.78 billion in wagers, more than halfway to 2021’s $10.94 billion. And with football ahead and September through December typically among the biggest months, it would take something very odd to change the tide.
In four full years, gamblers have risked $28.57 billion on sporting events, with the books retaining $1.92 billion. That works out to a hold of 6.7%.
The increasing marketing skill of books to entice multi-leg parlay bets has boosted the bottom line. Parlays have a 16% hold for the year so far, in a completely different stratosphere from the 3.3% hold on baseball, 1.6% hold on basketball, and so forth.
The handle for June came in at $633.2 million, a bit below industry expectations. Online wagers accounted for 93% of that monthly total.
A higher profit margin for the books in 2021 resulted in a gross revenue tax bonanza for the state of $102.6 million. Halfway through a more sedate 2022, the taxes collected so far are at $39.9 million.
Lawmakers set a tax rate of 8.5% for revenue the sportsbooks earn at the nine Atlantic City casinos and three racetracks, while for mobile sports bets, the tax rate is 13%.
Pennsylvania has roughly triple the tax rate, while New York’s is right around quadruple that of New Jersey. Operators in the Empire State in particular insist that the status quo cannot hold because they cannot make a consistent profit at a 51% tax rate.
But even with a relatively low tax rate, New Jersey’s Treasury has taken in $238.9 million in four years, dollars that never would have flowed if not for the state defeating the NFL and four other sports organizations at the U.S. Supreme Court in May 2018.
If you want to speculate on how much online casino revenue the state’s operators will generate in July 2022 — or really, any month — you’re safe in projecting between $130 million and $150 million. That’s because the number barely moves: $137.8 million in January, $130 million in a 28-day February, $147 million in March, $136.9 million in April, $136 million in May, and now $133 million in June.
And for all the publicity generated by the sports betting industry, it’s a rare month when New Jersey sportsbook operators — many of whom also run online casinos — produce even half the dollars that the latter does.
In fact, in June the sportsbooks only collected $39.9 million in revenue, nearly $100 million lower than online casino’s haul.
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