For the longest time, sports betting in the USA was banned under a federal law called PASPA (Professional and Amateur Sports Protection Act). New Jersey was the state that finally started and won the Supreme Court case against the federal government, which deemed PASPA unconstitutional and allowed states to regulate their own sportsbooks betting markets.
The Garden State did not hesitate, and laws and regulations were put into place to license local sports betting operators. In 2018, the legal online sports betting market was set up, along with retail betting at multiple locations.
Three years later, New Jersey shows that the move to legalize sports betting on the state level was a great idea. 2020 was a massive year for sports betting in NJ, as it beat Nevada in total wagers placed by more than $1.5 Billion. We looked into why New Jersey is doing so well and what we can expect in the years ahead.
Why Sports Betting Made Sense for New Jersey
New Jersey may not be the biggest state in terms of population, but it is massive in sports. Practically every citizen of New Jersey is a sports fan, with local NJ and neighboring New York professional sports teams enjoying massive popularity among the people.
It is for this exact reason that sports betting was already happening for many years before 2018. However, all that revenue was going into the pockets of illegal bookies, who were offering services without a license or any intent to pay taxes.
In 2018 alone, New Jersey bookmakers took in over $1.2 Billion in legal bets. By the end of 2020, that number went up to over $6 Billion in a year, which is a massive success over a short period. Of that amount, more than $50 Million went to state taxes, which have been used to fund several socially beneficial projects.
The Covid-19 pandemic likely had a lot to do with the massive increase in the revenue for online bookmakers in particular. Still, the growth itself is simply a function of many sports fans living in New Jersey and looking to bet on their favorite teams.
What’s next for New Jersey Bookmakers?
The new year started with a bang for sportsbooks in New Jersey. While many projected a slight dip in the overall bets placed in the state, the month of January along saw them take in close to $1 Billion in bets, a record month to date. Amazing months continued for local bookmakers in February, March, and April, as the state is on pace to break last year’s records by more than 30%.
In their fight to keep growing, the Garden State sportsbooks will have to fight off both illegal bookies and the Nevada casinos, which used to take in the majority of all legal bets in America in the past. People are likely to still bet in Vegas once the pandemic has passed, which may see a slight dip in New Jersey’s market, but there is absolutely no stopping the Jersey operators at the current rate.
As the New Jersey sports betting market continues to grow, some have questioned how healthy so much legal gambling actually is. However, the truth is that these numbers still only account for a part of the overall gambling proceeds, with illegal bookies still operating and taking tax dollars away from the state treasury.
Featured Image by Gerd Altmann from Pixabay