Online Sports Betting is Legal & Live in New Jersey
There are a number online options for sports betting in NJ. You must be physically located in NJ and you could potentially be asked to verify your identity should the automated system on each site not validate. The two largest sportsbook currently operating come from the daily fantasy space in DraftKings Sportsbook and FanDuel Sportsbook. Draftkings partnered with Resorts Casinos and FanDuel was recently purchased by Paddy Power Betfair. Betfair US has rebranded to the FanDuel Group and partnered with IGT an GAN, which deliver on the technical platform. Both products are sleek, easy to use and up and running for NFL.
Requirements to Place Wagers in NJ
In order to place wagers at New Jersey’s online sportsbooks, players must be at least 21 years of age. They must also be registered to play in New Jersey. Bettors need not necessarily be New Jersey residents, but they must be physically present in the state when the wager is placed. In other words, anyone located outside New Jersey may not use the New Jersey-based platforms to place wagers. Players who are registered for other forms on online gambling in New Jersey need not repeat their registration simply for the purpose of sports wagering. One registration is sufficient for all online wagering in New Jersey.
New Jersey Sports Betting Question & Answer
Frequently Asked Questions
New Jersey fostered the federal lawsuit, which altered the course of sports betting in the US. They were immediately ready to open physical sportsbook facilities, with mobile sports betting added in less than a month. Bettors can use several mobile apps to bet within the state borders.
When you account for nearly half the online sports betting revenue in the state, you must have something bettors find appealing. FanDuel has that something. They swamped their DFS rival and sportsbook app competitor by nearly $70 million in 2019.
Currently, New Jersey has reported over $6 billion in total sports betting handle. From this figure, more than $400 million has been generated in sports betting revenue, plus over $50 million in tax dollars for the state from sports betting operations, online and brick-and-mortar.
It is now legal to use the DraftKings sportsbook app in four states, including New Jersey. When New Jersey opened the door for online sports betting, DraftKings was ready. They brought a stable of nearly two million dedicated DFS accounts, many who visited or lived in New Jersey.
Among all the available sportsbook apps in New Jersey, FanDuel has assumed a dominant role. In New Jersey, FanDuel’s legal sportsbook app was one of the first to launch. It accounted for nearly half of the total online sports betting handle in New Jersey for several months.
Sports bet winnings are taxed for all bets with New Jersey sportsbooks, not just residents. Winnings over $10,000 tax at 5 percent of payouts. Winnings over $500,000 tax at 8 percent. If the winner does not supply a tax identification number, the rate is 8 percent.
To use the applications to bet online, you must be physically present in the state of New Jersey. These betting apps will use sophisticated geolocation that will only allow betting from within New Jersey state lines. Of course, we are going to have those select people that attempt to “jailbreak” the app to place bets. Still, for us law-abiding citizens outside of New Jersey—we are going to have to book a weekend trip to Atlantic City to enjoy the benefits of the sports betting applications. Oh, before you ask, if you aren’t 21 years of age, you cannot bet or gamble using these applications even if you are within New Jersey state lines. You’re going to want that money in your account anyway once you start making payments on those student loans, anyway.
Legislative History and Revenues
As the plaintiff in the case of Murphy vs. National Collegiate Athletic Association, New Jersey was ready to legalize sports wagering from practically the moment that the decision was issued. New Jersey had spent the better part of the decade mounting its legal challenge to the federal bill banning sports wagering and laying the groundwork for legal sports betting. Before Murphy, sports wagering had been prohibited nationally everywhere except for Nevada. This law was struck down as unconstitutional as the Supreme Court ruled that the federal government could not force states to enforce federal law.
Immediately after Murphy, the New Jersey legislature passed a bill that legalized sports betting in the state. All physical casinos in the state immediately began to prepare to offer sports betting. Sports betting revenues have been projected to reach $124 million annually. The ultimate size of the market may be much greater than anticipated. Since the early estimates tend to be conservative, New Jersey sportsbooks may exceed the projected revenue.
Regulations, Applications and Partnerships
The New Jersey regulations permit online sportsbooks to operate so long as the sportsbooks are partnered with an existing physical casino. While eight casinos offer physical sportsbooks, several online sportsbooks began in August 2018, with more on the way.
In the wake of the Supreme Court’s decision in Murphy, New Jersey rushed to establish temporary regulations that would enable online sportsbooks to get up and running. These regulations will be finalized after 270 days. These regulations govern both the application process as well as the taxation rate. Also, they address the operation of the online sportsbook.
Casinos are allowed to partner with up to three online entities to establish websites. Casinos are required to build physical locations for a sportsbook if they intend to operate an online sportsbook. Casinos are granted a 270-day waiver to operate an online sportsbook while the physical sportsbook is under construction. The fee to obtain an initial sports wagering license is $100,000, with at least $100,000 required for license renewal. The regulations establish the tax rate at 13 percent of revenues for online sportsbook operators. This rate is much lower than the prevailing rate in neighboring Pennsylvania. New Jersey refused to impose the “integrity fee” on each wager that sports leagues were seeking to police the gambling market. Many saw the attempt to impose the “integrity fee” as a money grab on the part of the sports leagues, and New Jersey was at the forefront of states rejecting that fee.
Existing Casino & Sportsbook Partnerships
|Online Sportsbook||Sports Betting Partners||Land-Based Affiliate||Mobile App||Website||Launch Date|
|DraftKings Sportsbook||Kambi||Resorts AC||Yes||Yes||8/6/18|
|Fox Bet||N/A||Resorts AC||Yes||Yes||9/13/18|
|William Hill||N/A||Monmouth Park||Yes||Yes||9/2/18|
|888 Sport NJ||Kambi||Caesars||Yes||Yes||9/10/18|
|Hard Rock||GiG||Hard Rock AC||Yes||Yes||1/26/19|
|Resorts Sportsbook||SBTech||Resorts AC||Yes||Yes||1/31/19|
|BetAmerica||SBTech||Golden Nugget AC||Yes||Yes||2/2/19|
|Golden Nugget Sportsbook||SBTech/Scientific Games||Golden Nugget AC||Yes||Yes||2/19/19|
|Borgata Sports||GVC/Roar||Borgata AC||Yes||Yes||5/14/19|
|TheScore Bet||Bet.Works||Monmouth Park||Yes||Yes||9/3/19|
|bet365||N/A||Hard Rock AC||Yes||Yes||8/30/19|
|Unibet||Kambi||Hard Rock AC||Yes||Yes||9/10/19|
Resorts and DraftKings
With regard to the actual opening of online sportsbooks, Resorts has led the way as the most aggressive casino operator to enter the market. Resorts have already used all of its three allotted partnerships. The first online sportsbook to launch was a partnership between Resorts and DraftKings. The partnership beat out several other applicants to become the first online sportsbook in New Jersey to accept bets. In fact, this partnership brought to market the first online sports betting app outside of Nevada. The partnership is able to leverage DraftKings’ extensive customer base from its daily fantasy sports operations. DraftKings claims over 10 million customers in the DFS space.
DraftKings had prepared extensively ahead of time in advance of the Murphy decision so that it could be the first company to market once sports betting was legalized in New Jersey. For Resorts, the partnership with DraftKings is a coup as DraftKings has significant brand recognition and an established platform. This helps Resorts gain a leg up on its competition as it became the first to market in partnership with a big name in the space. It is anticipated that Resorts’ physical sportsbook will also bear the DraftKings brand.
The partnership anticipates that it will offer both wagers on outcomes of events in addition to in-game wagers. DraftKings will also offer a variety of prop bets. In addition, DraftKings anticipates offering a novel wagering product that has never been offered before. This product is called “Live Ticket” and allows bettors to cash out or buy their way out of a wager while the event is still occurring. This partnership had a three-week head start when it had the entire market to itself prior to other casinos receiving regulatory approval to launch operations. Additionally, Resorts has inked partnership agreements with BetStars and SBTech to offer sports wagering through their platforms.
FanDuel and Betfair Partnership
After an attempt to merge with DraftKings was terminated due to antitrust concerns, FanDuel recently completed a merger with European gaming company Paddy Power Betfair. The merger combines a diverse set of gaming institutions under one roof, including Betfair Casino, Fanduel sportsbook, and daily fantasy sports, as well as the horse racing network TVG. Gaming technology company IGT has provided the platform that powers Fanduel’s online sportsbook. This technology runs both the desktop and mobile versions. GAN is another piece of the infrastructure that backs the combined platform. GAN provides the enterprise software that serves as the player account management system. The GAN system handles the backbone of the Fanduel applications, including the crucial security piece.
Paddy Power Betfair has provided Fanduel with additional operating capital and deeper pockets for Fanduel to leverage as it attempts to compete with its bitter rival DraftKings. Expanding its operations to meet the growing demand for sports wagering will require operating capital, which Fanduel did not necessarily have an abundance of after years of operating losses. The merger was more about the charge into sports gambling than Fanduel’s existing daily fantasy sports business, which had grown stagnant in the past two years. As a result of the merger, the combined entity can leverage Fanduel’s extensive customer base to offer more sports wagering options to its customers.
Borgata and playMGM
The next company to receive regulatory approval to begin operations in New Jersey was a partnership between Borgata and playMGM. The partnership went live with its own sports betting app on August 22, roughly three weeks after Resorts and DraftKings launched. The app is currently only available for Android phones, but it anticipates that both IOS and a web-based version will shortly be available for customers.
In addition to the traditional event betting options, Borgata will also offer prop bets and futures. Also, the Borgata platform offers live in-game wagering. It is anticipated that the Borgata/playMGM entry in New Jersey will operate separately from the company’s Nevada operations.
MGM has been an emerging player in the online gambling marketplace. The company has recently made several large investments, including a $200 million joint venture with GVC Holdings, a large UK-based company. MGM is the official wagering partner of the National Basketball Association and the WNBA. As an established player in the online gaming marketplace and the second partnership to enter the market, Borgata/MGM expects to operate from a strong position in New Jersey.
MGM has also entered the online poker space, although this partnership will be distinct from the poker operation for now. Still, Borgata players will have access to accounts that run off of a single wallet, meaning they can shift money between sports wagering and other online casino games.
SugarHouse and Golden Nugget
One day after Borgata and playMGM hit the market, SugarHouse Casino & Sportsbook opened for business as an online sportsbook in New Jersey. SugarHouse has partnered with Golden Nugget to reach the New Jersey market.
SugarHouse already has an online casino, and its sportsbook has become integrated with its other offerings as well as its online casino, a first for New Jersey. Rush Street Interactive operates SugarHouse’s online sportsbook. Like playMGM, SugarHouse offers a single unified wallet between all of its offerings. SugarHouse is currently available as both an Android and IOS app. In addition, unlike the other two existing sportsbook operators, the SugarHouse system is available on a desktop system. SugarHouse is powered by Kambi and is integrated with a user-friendly interface.
In addition to a plethora of various outcomes and prop bets, SugarHouse also will offer various in-play game options. Players can wager on individual player performance in addition to upcoming plays. This will transform the game watching experience for gamblers. Similar to DraftKings, SugarHouse customers will be able to cash out and buy out of wagers while the game is still being played. SugarHouse offers three different types of odds. These are American odds, fractional odds, and decimal odds. One unique feature that SugarHouse will offer is a jackpot parlay option.
Future Online Sportsbooks
The existing online sportsbooks will soon no longer have the market to themselves. Currently, there is a mad scramble for online sportsbooks to get up and running, and many more entries to the market are in the works. There are multiple other casinos in New Jersey, and each of them is in the process of readying an online sportsbook offering. Some of these offerings will be highlighted briefly below.
First, where DraftKings goes, Fanduel follows shortly thereafter. Fanduel has partnered with Meadowlands Racetrack and already operates the physical sportsbook on that site.
In addition, Monmouth Racetrack plans to enter the New Jersey online betting market. Although Monmouth was the first sportsbook to take a physical wager, it has fallen behind in the online sphere. Its partner is William Hill US, which is a widely recognized name in the betting market. Monmouth hopes to be running by the beginning of football season, which is the peak time for any sportsbook. In addition, Ocean Resort and Casino, Hard Rock Atlantic City, Caesars, Bally’s and Harrahs are all at various stages of the process for establishing online sportsbooks in New Jersey.
Impact of Online Sports Wagering on New Jersey
Online sportsbooks are expected to have a positive impact on New Jersey. Sports wagering, in general, has found a receptive market in its first few months of operation. The first month of sports wagering saw over $16 million in wagers placed with $3.5 million of revenue. These numbers covered only the fraction of June when the casinos were open for sports betting business and will be higher in full months.
Online sports wagering promises to provide a steady stream of revenue for New Jersey as operators must pay a 13 percent tax on online sportsbook revenues. New Jersey anticipates approximately $13 million of tax revenues in the first year of operation between taxes on physical and online casinos. These funds will go both for the revitalization of Atlantic City and other economic purposes. Atlantic City casinos had been struggling for many years, but the ability to accept sports wagers promises to pump life into the moribund industry. If Atlantic City casinos are able to invest profits into their properties, it may also serve to increase tourism in New Jersey, which will multiply the economic impact for the state. In addition, online wagering promises to add to the bottom line of New Jersey’s flagging horse racing industry.
Further, the ability to offer sports betting online will help casinos and racetracks diversify their product offerings, which will better enable them to stay competitive. Neighboring states are also introducing online and other physical sports betting options, and online sportsbooks in New Jersey will lead to bettors staying home to place their wagers. Also, it has been proven time and again that casino revenues produce jobs.
Impact on Live Sporting Events in New Jersey
While online sportsbooks will have an overall positive impact on sporting interest, it may not have an exceptional impact on live sporting events in New Jersey. New Jersey sportsbooks are prohibited from taking bets on college events that occur in the state. Outside of that, there are three professional sports teams that play their home games in New Jersey. The first is a hockey team, which does not result in heightened betting interest. The other two teams are football squads, and those games already sell out their tickets every week.
Where online sportsbooks will have an impact is on television ratings for sporting events. Bettors tend to like to watch the games where they have wagers, and sports leagues portend to be the big winners from the proliferation of online sports wagering. The major sports league had reversed course in the years before Murphy and had supported sports wagering as a means to increase interest in their product. Since much of the sports leagues’ revenue comes through television contracts, anything that increases ratings helps the leagues’ bottom line. Actual partnerships with leagues and sports teams may be difficult to execute because New Jersey regulations prohibit the operation of sportsbooks when the casino owner has a partnership or an interest in a team.
Legal History of Online Betting in New Jersey
When one thinks of sports gambling, sportsbooks, and wagering, Las Vegas comes to mind first and foremost. However, there is now an east coast rival to the sports wagering capital in Nevada—welcome to the world of sports betting, New Jersey!
New Jersey’s Long History with GamblingThe state of New Jersey has had a long history of gambling and housing casinos since the late 1970s, primarily in Atlantic City. However, it was not until 2012 that former New Jersey Governor Chris Christie signed legislation that would allow the casinos in New Jersey to offer sports gambling on professional and collegiate sporting events. This legislation was challenged by all of the major sporting associations, including the National Basketball Association (NBA), Major League Baseball (MLB), the National Football League (NFL), the National Hockey League (NHL), and the National Collegiate Athletic Association (NCAA). So on what grounds did these organizations challenge the New Jersey legislation? The Professional and Amateur Sports Protection Act of 1992 (PASPA).
A quick background on PASPA—it was passed by the US Senate on June 2, 1992, and then by the House of Representatives on October 6, 1992. It was signed into law on October 28, 1992, by President George Bush and then went into effect on January 1, 1993. So how did Nevada find itself exempt from PASPA? Well, it wasn’t only Nevada that was exempt. The states of Delaware, Oregon, and Montana were also all exempt as they were grandfathered into PASPA since they already had sports betting laws on the books. The only thing that sets Nevada apart from these other three states is the ability to wager and bet on the outcome of single-game sports. The three other states allowed sports gambling through parlay betting or other various types of sports betting formats.
Alright, back to New Jersey sports betting. In an effort to enjoin the legislation, the NCAA and four other professional sports leagues sued under PASPA, 28 USC section 3702 (1), which prohibits states from authorizing or licensing sports gambling. In 2012, the district court held that PASPA was constitutional and did not violate the anti-commandeering doctrine under the Tenth Amendment. This decision was affirmed by the Third Circuit, and the Supreme Court (SCOTUS) later denied Governor Christie’s petition for writ of certiorari (basically, asking SCOTUS to review the decision of the lower court). The Third Circuit held this decision by drawing a distinction between “repeals” and “affirmative authorizations.” This is an important distinction for the basis on which New Jersey passes its newest bill.
This brings us to the year 2014. New Jersey has now passed SB 2460. This bill repealed several longstanding state prohibitions on sports gambling rather than affirmatively authorizing sports gambling, i.e., theoretically finding a loophole and work-around from the basis of denial from the original Third Circuit decision. Once again, after review, the Third Circuit came to the same conclusion as back in 2012. However, this time around, SCOTUS did grant certiorari and agreed to hear the case. It was argued that the commandeering of requiring States to keep bans on their books was a violation of the Tenth Amendment. In a 6-3 decision, SCOTUS reversed the Third Circuit’s decision stating that:
“The legalization of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own. Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not. PASPA ‘regulates state governments’ regulations’ of their citizens. The Constitution gives Congress no such power.”
This excerpt was taken from the majority decision that was authored by Justice Alito (ironically, or not-so-ironically is a New Jersey native). Dissenting from the majority were Justices Ginsburg, Breyer, and Sotomayor, stating that “the court wields an ax…instead of using a scalpel to trim the statute” referring to the comprehensive reversal and declaration of the law’s unconstitutionality. The law was signed into law by Phil Murphy, who also had the privilege of placing the first sports bets in the state. What did he bet on, you ask? He put a few bucks down on Germany to win the World Cup and for the New Jersey to win the 2019 Stanley Cup. He’s 0-1, but only time will tell if the Devils, who made the playoffs this last year as a wild card team but fell to the Tampa Bay Lightning, will be able to get the Governor a nice cash-out next summer.
With this decision, the sports-betting floodgates have opened in New Jersey and are on the brink of bursting in a number of other states including California, Washington, Idaho, Arizona, Wyoming, North Dakota, Oklahoma, Louisiana, Iowa, Missouri, Illinois, Maine, Vermont, Kentucky, North Carolina, Mississippi, Rhode Island, and Washington D.C. As I am an avid sports fan, unfortunately, my home state of Texas is not ANYWHERE close to legalizing sports gambling. FanDuel still doesn’t operate paid contests in Texas, so legalizing any type of sports gambling is nowhere near being on the horizon. However, New Jersey is developing mobile applications that allow online sports gambling to their sportsbooks and casinos. So, can I be relaxing in my living room on a Sunday in Dallas watching the Cowboys go 8-8 again, miss the playoffs, and still be able to use my phone to place bets online to a New Jersey sportsbook? Good question. Let’s dive into it.
Who Benefits from the Sports Betting Laws
So just how much money has New Jersey made since it legalized sports betting? According to Wayne Parry of the Associated Press, two casinos and a race track took in $16.4 million in sports bet during the first two weeks that wagering has been legal in New Jersey. That $16.4 million produced a gross revenue for those three venues (Monmouth Park, Ocean Resort Casino, and Borgata) of about $3.5 million. Not bad for a two-week period. It wasn’t bad for the state of New Jersey either. Since the winnings in New Jersey are taxed, the state made almost $300,000. Where those dollars go has yet to be seen, but I would be surprised if a large percentage were to go to schools and public education in order to try to off-set any negative opinion or viewpoint that usually accompanies sports betting. It does look like both the state and the citizens of New Jersey both stand to benefit from the new sports betting laws.
Finally, the future of sports betting in New Jersey looks strong, as evidenced by the quick adaptation and implementation following the SCOTUS decision. Possibly, more importantly, the strides made by New Jersey will also influence and provide an illustrative path for sports betting implementation in other states.