Sports betting became legal one year ago, and some experts think New Jersey could someday overtake Las Vegas
The industry is handling hundreds of millions of dollars in Jersey and has taken in over $4 million in taxes for Pennsylvania.
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Watched a guy go into a sportsbook in Atlantic City on the first Friday of the NCAA Tournament in March.
The sportsbook was dimly lit, but lively. Games were on all the screens, and he was hot for Wisconsin. Loved the Badgers, even though they were facing an Oregon team that had won eight straight and played its way into the field by winning the Pac-12 Tournament.
But before jumping on Wisconsin, which started at 4:30 p.m., he put $3,500 on Cincinnati to beat Iowa in the early block of games. Cincy had won the American Athletic Conference Tournament the previous weekend and when the Bearcats jumped out to an 18-5 lead, it looked like a fine start to the day.
Then Iowa shot 65 percent from the field in the second half and roared back to win by seven. No problem, right? Still had Wisconsin starting in 90 minutes.
Yes, problem.
When our guy went back to put another $3,500 on the Badgers, he was told his limit had been cut to $2,800, essentially telling him that if he wanted to recoup the $3,500 he lost on Cincinnati, he’d have to win two games.
Casinos may impose limits at their discretion to limit their liability. It’s well within the regulations, but a restriction new to many bettors in this region of the country.
Aggravated, the guy jumped in a cab and went to the Borgata. He was able to get $3,500 on Wisconsin, which fell apart in the second half and lost by 18.
Down 7 large, it was time to go to dinner.
Happy anniversary
The one-year anniversary of the Supreme Court’s somewhat stunning decision to overturn the federal ban on sports betting outside of Nevada is at hand, and, boy, how things have changed since May 14, 2018.
Sports betting is a quaint gamble for the novice player. But for the pros and the heavy hitters, it’s a shark tank. Often — especially in these new markets — they’re wearing a bathing suit stuffed with filet mignon.
Delaware, the first state to ratify the U.S. Constitution in 1787, became the first state outside of Nevada to offer single-game sports betting. Tom Barton made the first two bets at Delaware Park, put $20 — and then another $1,000 — on the Yankees to win the 2018 World Series. Those were losing bets.
New Jersey and Pennsylvania soon came on board, though Pennsylvania has yet to approve mobile wagering. New Jersey has more than a dozen sites that offer online betting and has gained a hefty advantage over its neighbor. Pennsylvania is expected to start offering mobile betting in the next week or so.
At a recent sports-betting conference in Secaucus, N.J., the research and consulting firm Eilers & Krejcik outlined seven categories of sports bettors. This was interesting.
“While demographic diversity is relatively limited at least for now,” said Chris Grove, managing director for Eilers & Krejcik, “there is significant diversity in terms of motivation for betting among current sports betting customers.”
E&K talked to more than two dozen industry insiders, looked at 17 other studies, and surveyed over 1,200 sports bettors to reach the following identities:
Sharp bettors: These are the professionals and the ones who scare jittery bookmakers. These people don’t bet teams, they bet lines and they bet for profit more than others on this list. And, statistically, they’re more successful than the general public.
High rollers: Another group that makes bookies nervous. They might not put in the work sharps do, but they hit them hard, such as when a guy turned $85,000 into $1.1.9 million when Tiger Woods won the Masters last month. Sometimes high rollers make bets for sharps, which also doesn’t sit well with the bookies. But good luck proving it.
Would-be pros: Aspire to be sharps, often attracted to the autonomous lifestyle of professional gamblers. Grove said this group is high-maintenance and can be “keyboard warriors” on social media. Spot on.
Action chasers: People who bet for the thrill of gambling. The Eilers research suggests that this is the class that has the highest tendency toward problem gambling. More on that later.
Super fans: Sports nuts looking to add a little extra adrenaline by having money on a game. This is the group that wears Carson Wentz jerseys and bets on the Eagles no matter the line, site, weather, or injury report. Profitable for bookies.
Status seekers: Folks who use sports betting for ego and social validation. Talk about a toxic mix.
Casual dabblers: Self-explanatory. The woman who had 10 bucks on Country House to win the Kentucky Derby because she liked the name and the 65-1 odds is a casual dabbler.
The numbers
January marked the first month that the combined sportsbooks in the other states took in more action than Nevada, which started betting on sports in 1949. It was a big deal among insiders, given that other states weren’t even open for the first half of 2018. Individually, Nevada is still king, but its lead is shrinking, and New Jersey is the 65-1 horse stalking just outside the rail.
The Garden State is drawing customers from New York and Philadelphia to both its retail outlets, and more important, online. In March, New Jersey took $372.4 million in bets. More than 80 percent of that money was placed online ($298.2 million).
Since PASPA was overturned, nearly $7.9 billion has been wagered on sports nationwide, generating $55.3 million in state and local tax revenue.
“We have catapulted ourselves to the second-largest sports-wagering market in the country,” New Jersey Gov. Phil Murphy said at the sports-betting conference in Secaucus. “Nevada is clearly in our sights. We could overtake them — and their decades-long head start — according to some experts, as early as next year.”
Nevada took in $596.8 million in bets in March, $224 million more than the Garden State. New Jersey’s numbers almost surely will tumble when New York legalizes sports betting and Pennsylvania adds mobile.
Murphy said that sports betting “has brought new life and new customers to our racetracks and casino.”
California would threaten Nevada, except there’s not much of an appetite for sports betting in the Golden State. They can’t even keep their football teams in one place.
Meanwhile, in Pa.
Evan Davis, general counsel for the SugarHouse Casino in Fishtown, has been on the front lines since the Professional and Amateur Sports Protection Act (PASPA) was overturned by the Supreme Court last May. His casino started taking sports bets on Dec. 15, missing most of the lucrative NFL season.
“The commonwealth was losing out on tax revenues to neighboring states,” Davis said. “Having [sports betting] generates additional revenue for Pennsylvania. It helps us provide another wagering amenity to our customers. … How we’ve seen it resonate both with existing customers and those who might be new to the property has exceeded our expectations.”
Since the first Pennsylvania sportsbook opened at Penn National’s Hollywood Casino just outside Harrisburg in mid-November, the Keystone State collected a modest $4.5 million in taxes through March.
Pennsylvania charges $10 million for a sports betting license, plus a 36 percent tax rate, by far the highest in the land. New Jersey’s rate is 8.5 percent (13 percent for online), while Nevada is 6.75 percent. Delaware’s sportsbooks are operated by the state’s lottery.
“When we launched in December, the Eagles were obviously the most popular team, given where we were in the sports calendar,” Davis said. “But as the NFL season wound down … the interest has pervaded across sports. Not just on local teams and local markets. We’ve seen a lot of interest running the gamut” from college basketball to NBA/NHL playoffs to international soccer.
Problem gambling
There is, of course, an ugly side to the proliferation of sports betting.
Keith Whyte, executive director for the National Council on Problem Gambling, was sipping on a bottle of water after a seminar in Secaucus, when he was asked about the explosion of sports betting in the last year.
“We know that people in the United States who are being treated for problem gambling started gambling between 10 to 12 years old,” he said. “If you’re not doing educational messaging starting in elementary school, you’ve already missed the boat. Most kids who start to gamble [that young] will never have a problem. But we don’t know what really predicts risk. We don’t know what those 100 kids who start to gamble early, we don’t know the two to four who will go on to develop problems. We don’t have the science yet. The state is making an enormous amount of money off this. They have a higher obligation to make sure that prevention is done.”
The Inquirer and Daily News have run betting lines for decades. They were mostly for street-corner players and barroom bookies. Just some people looking for a little action.
Eight states offer legalized sports betting and four others are pending launch. Many of the laws in these states are as varied as the residents who live in them. Tennessee, for instance, is not legal yet, but is moving toward a model that has only online sports betting.
“This is the first generation of kids that’s growing up with mobile access and now legalized sports betting,” said Whyte. “In Pennsylvania, the expansion of gambling has been massive. Education needs to look a lot like the societal conversation we have around alcohol, where it starts young and early with parents and continues through the educational system.”