New Jersey will shape US online sports betting nationwide
May 15, 2019
State legislators will have their eyes on how the industry is progressing in the state that has fully embraced mobile sports betting
New Jersey has been the trailblazer for mobile sports betting in the US following the repeal of the Professional and Amateur Sports Protection Act (PASPA). So as other states consider their options when it comes to regulating sports betting, it’s no surprise that many are turning to New Jersey to discover how the market there is evolving.
In our latest iGaming report, All the ways players pay, we take a closer look at how this landscape is beginning to shape up and the lesson other states need to take on board.
Mobile is the preferred sports betting method of new players
In New Jersey, sports betting via mobile apps has the taken a clear market-leading share of betting volumes, and this trend appears to only be strengthening as the market matures and players become more comfortable with making wagers online.
For the first three months of 2019, approximately 80% of the total New Jersey sports betting handle has been taken through mobile apps. Monthly online sports betting handle grew 15% in March, exceeding $298m. Mobile sports betting revenue surpassed $25m in March, a 60% increase on the previous revenue high of $15m set in January.
Our research indicates that the volume of online sports betting that is driving industry growth appears to be predominantly being driven by new players. For All the ways players pay, we surveyed current sports bettors and consumers who indicated that they would strongly consider sports betting if it were legal in their state, and there is a clear preference from potential future sports bettors for being able to make wagers online.
Across our national survey nearly two thirds (64%) of potential future sport bettors indicated that they would make wagers online if it were legal to do so, whereas less than half (46%) said that they would be interested in putting on sports bet through a retail sportsbook.
This data, coupled with the success of the mobile sports betting market in New Jersey to date, indicates that in order to really appeal to a target market of new players and grow the industry to its full potential, regulating to permit mobile sports betting as well as retail sports betting is critical.
Players that only bet on sports online will generate higher revenues for operators
For the same study we also asked sports bettors to tell us how frequently they made a wager, and the average size of wagers they made. On average, players that only placed sports bets online placed significantly more than players that also or exclusively wagered with retail bookmakers.
The median sports bettor wagers 12 times a year, with a median bet size of $35 per bet. This generates an average handle per sports bettor of $540 per year.
The median online only sports bettor wagers 52 times a year, with a median bet size of $45, generating a median handle of $1,950 per year.
This is even more pronounced in New Jersey, where regulators and operators have taken a mobile-first approach to the sports betting market. 40% of sports bettors in New Jersey said they wagered at least once per week and 13% said they wagered at least once per day. In Nevada, which has a prolonged history of retail sports betting, only 29% of sports bettors wagered at least once per week and 5% place a wager at least once per day.
Players’ greatest concerns are legality and security when placing wagers online
One further takeaway is that although the majority of potential future sports bettors would prefer to place sports bets online, they are not prepared to place wagers on unregulated sites to do so. 70% of gamblers told us that they will only sports bet where it is clearly legal to do so.
And 44% of players say that a change in regulation will make a difference to how often they place bets. So it is clear that promoting regulated online sports betting will not suffer the drawback of encouraging players to place bets on unregulated sites; instead unregulated operators will be not be able to sustain any market share in a regulated market as players clearly prefer licensed operators.
And in addition to regulation, players are most concerned that their funds and financial data will be kept secure when they make deposits to an online gaming account. 37% of players told us they worry about making deposits online, so much so that 55% of players said that they would rather bet online using cash if it were convenient to do so.
For this reason more current (35%) and potential future sports bettors (45%) named their level of trust in the security of their payments as a top priority than any other factor when deciding which sports betting app to create an account with.
Getting the balance between player experience and Know Your Customer right
The US online sports betting market will develop its own unique characteristics, but one common factor it will share with more mature regulated markets such as Europe is the need for operators to offer players best-in-class user experience whilst also protecting players with the most robust Know your customer (KYC) and anti-fraud measures possible.
One way to achieve this is for operators to work with partners that have a proven history of delivering industry-leading solutions to gaming operators. We have already seen how successful this approach has been in New Jersey; license holders have partnered with European operators and worked with globally recognized providers such as Paysafe in an effort to guarantee that the highest industry standards are delivered from the outset.
For states that are considering how to move forward with legislation, or license holders in regulated states that are developing a market entry strategy, engaging with providers with a track record of excellence in regulated markets in the same mould as those in New Jersey have already done is key to developing a safe, sustainable, and successful gambling industry.