Sports gambling scored big in June as Delaware and New Jersey became the first states other than Nevada to accept wagers on sporting events. Although it was a good performance, it's not yet the home run some people may have expected.
And they're off!
Delaware was first and started accepting bets on June 5. Through June 24 -- the end of the state's fiscal month -- Delaware took in $7 million in bets, which generated revenue of less than $1 million (the total amount bet is called the "handle;" the amount won by sportsbooks is "revenue").
New Jersey saw even better action even though legalized sports gambling only began on June 14. Through the end of June, the Garden State's handle was $16.4 million, with revenue of nearly $1.2 million.
There are a lot of asterisks that need to be placed alongside these records, most notably that they obviously weren't complete months and only a handful of casinos and racetracks were actually accepting wagers.
For example, while Delaware's three racinos accepted wagers for the 20 days it was legal to do so (racinos are racetracks that also have casinos), in New Jersey, only MGM Resorts (NYSE:MGM) Borgata casino and Monmouth Park racetrack were accepting bets from the start. The racetrack actually accepted the first legal bet made in the state, which was wagered by Gov. Phil Murphy, who bet on the World Cup (he lost).
The Ocean Resort, which was previously the bankrupt Revel casino that reopened for business this past May, began accepting wagers on June 28.
Other Atlantic City casinos are expected to begin taking bets soon, and the Meadowlands Racetrack began doing so on July 14. We'll see these betting numbers increase over time, but even so, there were a few interesting outcomes already.
A dark horse candidate in the lead
Perhaps the biggest surprise so far is that the Borgata has not been New Jersey's big winner, at least not yet. Despite being the state's biggest and most profitable casino, Monmouth Park finished the month well ahead of the Borgata, generating revenue of $2.28 million while the casino took in less than $1 million. The Ocean Resort generated almost $192,000 for its one day of operation.
Also, of the total amounts reported so far, bets placed on future sporting events that have yet to occur are being counted in current month reports and are being taxed in the month they're placed. That means sports betting results could be volatile going forward since payouts for these bets could occur months after the bets were made. Delaware doesn't break out how much of the $7 million wagered was for future events, while New Jersey said over $1 million of the $16.4 million was for such events.
New Jersey also has a separate line item for "unredeemed winning wagers," which represents bets that were won but not cashed in. That totaled $1.2 million for the two weeks in June, and they'll be deducted from the sportsbooks' revenues in future periods when they're finally redeemed.
New Jersey also said that of the total handle reported, 94% went to completed events, 66% of which, or $10.1 million worth, was bet on baseball. Another $2.2 million went to soccer (of future events, soccer drew in 48% of the handle and football took in 27%).
The wave still to come
Other states are expected to formalize their own regulatory framework for sports betting in the months ahead, but it's likely the New York metropolitan area will see a lot of action, which puts the Meadowlands Racetrack, the site of MetLife Stadium -- the home of football's Giants and Jets -- which is also in the vicinity of baseball's Yankee Stadium and the Met's Citi Field, a likely prime destination for sports gamblers.
Despite the Borgata being the first casino to accept legal sports wagers, and other casinos soon to join in, Atlantic City might not be the biggest bet for sports gambling, though it will undoubtedly hold its own. After all, Philadelphia is nearby and home to a number of major league sports franchises and Pennsylvania is expected to adopt formal gambling regulations in early 2019. Similarly, New York is expected to come online soon, and both states could siphon off gamblers. That's a problem Atlantic City has had to contend with for years.
So with its first at bat in the game, New Jersey smacked a solid single and it's not likely to strike out in future appearances, but with more nearby states to allow sports gambling in the near future, it may not be the cash grab home run that was anticipated.