New Jersey Sports Betting Revenue Declines In May
Tough Month In The Garden State
Due in large part to a tough month from new operator Fanatics, there was a significant 2024 sports betting New Jersey revenue decline in May both from the previous month and on a year-over-year basis.
The replacement of PointsBet by Fanatics has gotten off to a rough start and while that may be expected in an operator’s first month in a new state, it’s an inauspicious beginning for Fanatics. Also, it shows how Fanatics will heavily impact the numbers in a big betting state like New Jersey.
Total profit for operators clocked in at $78.8 million, a 4% haircut from May 2023 when profit was $82.2 million and an even large trim from April, when profit was $106.2 million — a 26% decline.
The total handle in May was $838.9 million, a massive drop-off from the billion-plus handle in April. That made May 2024 the first month of this year with a sub-billion-dollar handle. The hold rate fell below 10% as well. Bettors taking FanDuel odds did their part, as FanDuel easily led the way in terms of revenue in the Garden State.
To be fair, though, handle on a year-over-year basis increased nearly 8% from May 2023 to May 2024, exhibiting continued growth in New Jersey.
So, things are still going very well overall in New Jersey despite the lower-than-expected numbers in May, when there are a bunch of major sports still going on. It’ll be interesting to see that changes in June as the NBA and NHL playoffs wrap up and in July/August when baseball is the big attraction.
Fanatics Took It On The Chin
The New Jersey revenue decline in May was felt across the board by all operators, but Fanatics — which took over PointsBet license this past month — was the main culprit.
After PointsBet climbed to the second-biggest operator in New Jersey in April, notching a 31% market share, Fanatics had just under 3% of the market in May and collected just $2 million in profit.
That’s a huge market share decrease and, reportedly, it was due to PointsBet nabbing one major individual bettor that apparently didn’t stick with Fanatics.
Of course, it’s just one month, and Fanatics will probably find a way to recover its position in the state. But, there are usually some bumps in the road when starting fresh on a license.
This is especially true with very established players in the marketplace, like FanDuel and DraftKings — the latter of which saw its market share jump 10 percentage points in May which could be a sign that PointsBet’s big bettor returned to DraftKings.
New Jersey is a state with a lot of sports betting apps available to bettors so it can be very hard for new entrants to stand out. Fanatics may be a big name in the apparel and merchandise market but, from a betting perspective, it may take time for people to think of it as a place where they can go to wager on sports.
No wonder why Fanatics wasn’t even in the top-six of operators in the state in May, falling below even the likes of BetMGM, bet365, Caesars and ESPN Bet.
2024 Has Still Been A Banner Year
Even with the New Jersey revenue decline in May, 2024 has been an incredibly profitable year for sports betting operators in New Jersey and has been just as good for the government’s coffers.
New Jersey collected over $10 million in sports betting taxes in May and almost at $500 million in tax receipts collected all-time from legal sports betting, which is an astounding figure.
Also, total handle in 2024 — through May — is already over $6 billion total with revenue over $500 million. Even with the down May, those numbers are well over what they were in 2023 as profits are up 37% and even tax revenue is up $66 million at this point of the year compared to 2023.
Clearly, something is going right in New Jersey, and things should get even better once Fanatics gets its feet under it and football season starts back up again.
For now, FanDuel continues to be the best online sportsbook in the state in terms of popularity, clearing $36.7 million in May profit and notching $211.4 million in profit on the year. There’s a big drop-off to DraftKings, though, and an even more significant gap between DraftKings and the rest of the field.
Maybe that indicates just how much room there is to grow and, with the substitution of Fanatics for PointsBet, it makes sense that there is space for a third big player in the market once again.
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