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Overview: Online Sports Betting In New Jersey

Online Sports Betting in New Jersey - New Jersey Breaks Another Record

New Jersey bettors are part of the largest sports betting industry in the country – so far. It’s not only one of the most successful sports betting industries, but it’s also the pioneer for legalization across the United States and has opened the door to legislation in every other state. Bettors have many online sports betting options available, too. So far, New Jersey has 21 sportsbook apps and sites to choose from for online sports betting. Here’s what you need to know about this thriving market.

How Sports Betting Came To New Jersey

When sports betting was outlawed in the United States, four states were still allowed to regulate it:

However, there was a fifth state that could legalize sports betting with certain conditions. New Jersey was allowed to legalize sports betting if it did so at least a year after PASPA passed. The Garden State did not legalize sports betting before that deadline, so the clock ran out.

But in 2012, New Jersey tried to legalize sports betting. The state lost in federal court, so they tried again in 2014. Governor Christie lost his court cases all the way to the Supreme Court, dragging the case all the way into the next Governorship. (The case was originally Christie v. NCAA. It was changed to Murphy v. NCAA when Governor Murphy took office.) A slightly conservative court won in favor of states' rights and ruled PASPA unconstitutional.

The Supreme Court decided Murphy v. NCAA on May 14, 2018, and New Jersey signed sports betting into law less than a month later on June 11. William Hill took New Jersey’s first sports wager three days later from Governor Murphy himself. New Jersey’s sports betting has grown by leaps and bounds ever since.

How Much Money Does New Jersey Online Sports Betting Make?

New Jersey has an even bigger sports betting market than Nevada. In May 2019, New Jersey received more money in wagers than Nevada. New Jersey has become a sports betting powerhouse just under a year after creating a new industry. But during 2020, New Jersey has continued breaking its own records. New Jersey bettors wagered $931 million in December 2020. It was also the fourth month in a row where New Jersey bettors set the national record for betting handle.

Nevada can’t say that.

Over 80% of those wagers were made online, too. It’s a testament to how robust New Jersey’s online sports betting industry is.

Where Does New Jersey’s Online Sports Betting Tax Revenue Go?

In November 2020, New Jersey sports betting taxes generated $6.2 million. Retail and online sports betting are taxed at different rates. Here’s the breakdown of online and retail sports betting:

  Retail Sports Betting Taxes Online Sports Betting Taxes
Tax Revenue $562,273 $5,671,549
Online/Retail Split 9% 91%
Tax Rate 8.5% 13%

Like most states, New Jersey gets most of its tax revenue – and wagers – from online betting. Depending on the type of sportsbook, online sportsbook taxes go to:

  • New Jersey’s Casino Revenue Fund
  • Atlantic City tourism and marketing
  • State General Fund
  • Division of Local Government Services

Basically, the sports betting revenue goes toward non-specific parts of New Jersey’s budget and covers some administrative costs. New Jersey’s sports betting industry may be lucrative, but it’s not a big enough powerhouse to make a dent in the state’s entire budget. Sportsbook taxes probably aren’t going to have the same impact on New Jersey as they do in other states.

How New Jersey Cannibalizes New York

New Jersey online sports betting owes part of its good fortune to Governor Cuomo’s reluctance to legalize mobile sports betting. About a quarter of New Jersey’s mobile sports wagers are made by New Yorkers. Mobile sports betting is illegal in New York, and the New Jersey border is closer than New York’s retail sportsbooks. As long as New York deliberates whether to legalize mobile sports betting, their bettors will contribute millions of dollars to New Jersey instead. It’s fantastic for New Jersey but terrible for New York.

However, if New York legalizes mobile sports betting, New Jersey’s sports betting revenue will take a hit. Nevada will reclaim the top sports betting spot, and New Jersey will have to play catch up. Those two states will be worth watching together.

New Jersey Online Sports Betting

New Jersey tried to legalize sports betting about 20 years after its deadline to do so expired. But that didn’t stop the Garden State from failing forward toward a win at the Supreme Court level. That win opened the floodgates to sports betting legalization across the country. Governor Murphy made New Jersey’s first sports wager one month after the Supreme Court ruling, and the rest is history.

New Jersey bettors wager more on sports than anywhere in the country. However, it’s also getting a lot of New York bettors who are frustrated with New York’s limited sports betting options. That boost is only temporary, so New Jersey will have to watch New York carefully. But anyone in New Jersey – or near its border – can try sports betting for themselves to see what it’s all about. Check out our Gambling 101 guides to get started betting.

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