Sports Betting Is Not Yet the Touchdown New Jersey Casinos Expected

New Jersey sportsbooks took in almost $184 million in wagers in September, more than double the amount bet since the state legalized sports betting in June, probably a result of the start of the National Football League season. And though Atlantic City's casinos were looking for sports betting to revive their fortunes, it's not playing out quite as they expected.

Outrun by the horses

While Resorts Casino was the big winner in September, registering $8.8 million in sportsbook revenue for the month, that came mostly from online betting. Instead, it was New Jersey's two horse-racing tracks that generated the most revenue from sports betting. (Revenue is the amount sportsbooks hold on to after paying out winning bets; handle is the total amount wagered.)

Image source: Getty Images.

The Meadowlands racetrack had total revenue of $7.2 million, $4.4 million of which from bets taken at the track. Monmouth Park had $2.2 million in revenue, almost all of which came from on-site betting. Combined, the two tracks realized 57% of the state's total on-site betting revenue. The Meadowlands alone almost matched the combined total of $4.9 million in revenue generated by the six Atlantic City casinos with sportsbooks.

It wasn't a complete bust for casinos, though, as MGM Resorts (MGM -0.33%) did well with $2.5 million generated by its Borgata casino and hotel sportsbook.

Digital dominance

In 2016, New Jersey voters killed a referendum to expand casino gambling beyond Atlantic City because many worried that the state's seven remaining casinos would be hurt. Five casinos have gone bankrupt since 2014, and if the sports betting results are any indication, it's understandable why the casinos were adamantly opposed to additional competition in the state.

Still, most sports wagers aren't placed at racetracks or casinos, but rather online. In September, over half the bets came via internet wagers, either online or via a mobile app. Yet the casinos are lagging here as well.

As noted previously, Resorts led the way with $8.5 million in digital revenue, most of which likely came from its DraftKings partnership, as its BetStars affiliation only launched in the middle of the month. Yet that accounted for 68% of all the internet wagers made. Add in another 22% in total internet wagers generated by the Meadowlands through FanDuel, and there was very little action occurring through the sites of the rest of the gaming houses. 

Data source: New Jersey Division of Gaming Enforcement.

The big winners are those that have partnered with the daily fantasy-sports sites DraftKings and FanDuel. But British sportsbook giant William Hill launched its app last month and still has to introduce its online interface, which may help Monmouth Park and Ocean Resort when it is fully operational.

An October surprise

October should be an even bigger month for sports betting. There was another full month of the NFL football; baseball's playoffs were underway, including a few Yankees games (which could help the Meadowlands and Monmouth Park because of their proximity to New York); and the pro basketball and hockey seasons have started.

Resorts quickly surpassed MGM's Borgata as the premier casino sports-betting operation, particularly as Caesars Entertainment (CZR) hasn't gained any tractional at either Bally's or Harrah's. But with the Meadowlands racetrack right across the parking lot from MetLife Stadium, the home of football's Giants and Jets, watch for it to maintain its lead as the rest of the season unfolds.