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.
- 1 Online Sports Betting is Legal & Live in New Jersey
- 2 Requirements to Place Wagers in NJ
- 3 Legislative History and Revenues
- 4 Regulations, Applications and Partnerships
- 5 Existing Casino & Sportsbook Partnerships
- 6 Resorts and DraftKings
- 7 Borgata and playMGM
- 8 SugarHouse and Golden Nugget
- 9 Future Online Sportsbooks
- 10 Impact of Online Sports Wagering on New Jersey
- 11 Impact on Live Sporting Events in New Jersey
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. Prior to 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 there are eight casinos that 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. In addition, 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 sportsbooks. 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
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 has 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 occuring. 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.
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 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 sportsboook operators, the SugarHouse system is available on a desktop system. SugarHouse is powered by Kambi and is integrated with an user-friendly interface.
In addition to a plethora of various outcome 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 three 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 peak time for any sportsbook. In addition, Ocean Resort and Casino, Hard Rock Atlantic City, Caesar’s, Bally’s and Harrah’s 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 operation of sportsbooks when the casino owner has a partnership or an interest in a team.