With the holiday festivities typically causing a slowdown in sports action, New Jersey’s operators were braced for slowdown in December. However, as is often the case, one vertical’s loss is another one’s gain as internet wagers were up compared to offline revenue last month.
In what appears to be a case of sports fans taking shelter from the cold, three of the state’s six online licensees saw improvements in their takings between November 2018 and December 2018:
- Bally’s: $205,046 vs. $528,760
- Borgata: $194,212 vs. $22,436
- Ocean Resorts: $915,930 vs. $1,044,026
- Resorts Digital Gaming: $7,172,171 vs. $6,690,969
- New Meadowlands Racetrack: $4,437,916 vs. $5,532,837
- DARBY: $1,521,295 vs. $1,296,348
*November 2018 vs. December 2018.
Online/Offline Discrepancies Arises
In total, online and offline sports wagering revenue topped $20.8 million in December. Compared to November’s $21.2 million, that’s a 1.89% decrease. However, while a backwards step is undesirable, there are some positives to be drawn from the latest financial filings.
Firstly, a decrease in offline activity was the biggest contributor to the recent downswing. For example, Borgata Hotel Casino & Spa, which is constructing a new sportsbook, took $189,677 in sports bets during December. The previous month its cashiers collected $877,835.
What’s more, December is a notoriously tricky time for any business. In 2017, live casino revenue for the final month of the year was 1.8% lower than it was during the same period in 2016. Beyond that, we only have to look at retail revenue during the month of December to see the issues many offline businesses face. For instance, in the UK alone, retail parks saw footfall fall by 3.2% in December, while shopping centers experienced a 1.7% drop as shoppers took their custom online. Put simply, fewer people are spending their money offline in December.
This dynamic is just as apparent in the sports betting world. In fact, once you couple this with families leaving town for the holidays and an increase in alternative forms of entertainment, a fall in live sports betting revenue is to be expected.
The second reason we take solace in the recent results is the upturn in online gaming revenue. Prior to Supreme Court’s ruling on the Professional and Amateur Sports Protection Act (PASPA), the phrase “a rising tide lifts all boats” became something of a mantra. Essentially suggesting that sports betting would benefit casino gaming and poker, analysts believed the demise of PASPA would open the floodgates of change.
Smooth Sailing for All Ships
Although we’re still waiting for the advent of legal online sports betting to have an impact on a regulatory level, it’s clearly having a positive effect on other verticals. As per the latest report from the New Jersey Division of Gaming Enforcement (NJDGE), internet gaming win in December was $29 million. Compared to the same accounting period in 2017, that represents a 39.7% increase in revenue.
While there are likely to be a myriad of factors contributing to the upswing, sports betting certainly played it’s part. In fact, the 39.7% year-on-year increase is more than three times higher than it was between December 2017 and December 2016 (internet win was up 12.9%).
What’s the major difference between 2016/2017 and 2017/2018? Sports betting. Again, it’s hard to gauge the true impact it’s had on casino gaming and poker. However, there is clearly a significant improvement since online sports betting went live.
What’s more, we’re now seeing operators embrace crossover promotions. Taking inspiration from their European counterparts, the likes of 888 have created bonuses that encourage activity across multiple disciplines.
Basically, by giving players the chance to earn bonus points by betting on sport or casino games, the top sites have made it easier to earn bonuses and, simultaneously, homogenized their customer base. Add to this the evolution of FanDuel with its recent deal with GAN and you’ve got a recipe for success.
To put it another way, operators are learning to swim with the tide and, in turn, improve their bottom-lines by using sports to buoy other verticals. So, while a slight drop in sports betting revenue might appear to be a bad thing, a closer look at the details suggests that our ships are still sailing in the right direction.