New Jersey Sports

Racetracks vs. Casinos: Who’s Winning The Early Battles In The NJ Sports Betting War?

Racetracks-vs-Casinos-early-battle

On Tuesday, New Jersey regulators released July revenues for Atlantic City’s casinos as well as the sports betting figures for two racetracks, and as was the case in June, firm conclusions that will mean much going forward aren’t easy to come by yet.

After all, only five of a potential 14 sites — consisting of nine Atlantic City casinos, three racetracks, and two sites of former racetracks — had even begun offering bets by the end of July. And two of those are only partial figures.

But we are learning some things already. For example: The two racetracks had a combined per-day revenue average in July of $103,037. Adding together the three Atlantic City casinos’ per-day averages only gives you a total of $60,494.

So the tracks won, right? It’s not that simple.

Casinos cashed in, too

There’s much more to a property’s bottom line than just its sports betting revenue.

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The casinos — which will add Harrah’s and Resorts to the sports betting ranks in August’s figures released by the Division of Gaming Enforcement — undoubtedly collected far more ancillary revenue than the tracks.

At the racetracks, you can figure that some sports bettors also tried their luck at a few races, had a beer or two, and maybe even ate dinner. And in Monmouth Park’s case, some paid to play miniature golf. (The U.S. Open of the sport was played there last summer. No kidding.)

The casinos, meanwhile, have countless ways of pulling in money. Patrons shell out to stay in one of their expensive high-season hotel rooms for a few days, play the casino games, and have their own food and drink — not to mention shopping and perhaps a spa appointment.

Of course, some of these casinos are going to be sold out in July anyway, with or without sports betting to attract customers. Still, the addition of sports betting can’t hurt a casino’s foot traffic.

Meadowlands by more than a nose

The Meadowlands Racetrack’s sports betting numbers were relatively dazzling. Its FanDuel Sportsbook rang up $1.36 million in revenue in just 18 days, compared to 31-day figures of $1.04 million at Ocean Resort (formerly Revel), $860,000 at Monmouth Park, and $560,000 at Borgata.

Per day, the sports betting revenue breaks down like this:

  • Meadowlands: $75,415
  • Ocean: $33,444
  • Monmouth Park: $27,622
  • Borgata: $18,156
  • Bally’s: $8,894 (open only July 30 and 31)

So the per day of the four non-Meadowlands properties added up to a combined edge of $88,116 — not that much more than the $75,415 that “The Big M” profited per day on its own.

Honeymoon over already?

There was a big dropoff for two properties in July — a sophomore slump, if you will.

Monmouth Park managed a remarkable $134,069 per day in 17 days of June, while Borgata handled $58,048 per day, with Ocean averaging $48,168 in four days.

Credit the novelty factor driving much of those initial meaty per-day averages. All of them declined in July. It’s worth noting that some North Jerseyans likely flipped from Monmouth Park to the Meadowlands last month for reasons of convenience.

Also, June handle was bolstered by eager customers making NFL futures bets out of the gate, a trend that tends to slow after the initial rush.

After New Jersey sports betting generated total revenues of $3.46 million in June and $3.83 million in July, look for a big uptick in August’s figures, for several reasons.

First, there were no full-month properties in June and only four full-month sites in July. That figure will rise in August. More people will be betting on preseason football this month than a casual NFL fan might imagine. And there even are a handful of regular-season college football games late in the month.

And then there’s mobile sports betting. DraftKings debuted with a soft launch on August 1 and a full launch five days later.

Breaking it down by sport

Increased football handle would be music to the ears of operators, if a small sample size in June and July is to be continued. Operators had a total of $160,187 in “completed events” handle in the sport and managed a whopping 19 percent house edge.

Meanwhile, a $1.05 million completed-events handle for basketball yielded a measly 0.2 percent advantage. Baseball produced a respectable 4.9 percent edge on $36.3 million in handle. Overall, across all sports, operators have managed a 5.8 percent edge so far this year.

A bit of context: Sports wagering year-to-date gross revenue is a modest $7.29 million compared to $1 billion from Atlantic City slot machines, $389 million from table games, $152 million from online gaming outside of poker, and $13 million from online poker.

How big can this thing get?

When will we start to get a better handle, so to speak, on the true potential of the New Jersey sports betting market? The short answer is mid-November — when the October figures are out and can be compared to September’s football month debut.

But what neighboring Pennsylvania has up and running at that point is another factor, and even more important is at what point next year New York gets into the sports betting game. That will impact the Meadowlands, for sure.

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