NORTON NOTES: NJ Sportsbooks, Helping or Hindering?
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By Steve Norton
CEO, Norton Management
My recollection of New Jersey's attempt to repeal PASPA, was to help Atlantic City recapture visitors, lost to New York, Pennsylvania, and Maryland. Well, in the first 10 months of 2019, Atlantic City's 9 casinos have won $96 million, but only $14.7 million was won at an AC sportsbook; a paltry 6.2% of the total sportsbook win, of $237 million, in the Garden State.
Nearly 60% of the sports betting hold is retained by the Meadowlands and Monmouth racetracks, a healthy 25% from the sportsbook at the Meadowlands, likely from many Manhattan residents looking for a superior experience.
AC has lost 13 of the 14 million line run bus customers, to more convenient casinos like the original Sands Bethlehem, and overall visitor totals are now an estimated 22 million, compared to approximately 35 million, before PA gaming. AC still badly needs air service, that would help attract mid-week conventions and trade shows, and allow AC to compete with Las Vegas and Biloxi, for markets like Atlanta.
However, there is a less obvious, but potentially more dangerous issue that states should be considering: the likely negative impact on their lottery revenues that support important issues such as education. Most lottery programs earn 25% to over 40% on bets for their many games, but a careful analysis of sports betting will show that the operator generally earns 5% to 10% on sports bets made, so even a 10% tax would only return 1% or less to the state. And the convenience of betting online could easily reduce the visits to your players’ favorite lottery purveyor.