Estimated Reading Time: 2 minutes
In January of this year, New Jersey set records with $540.1 million in sports bets made and $54 million in sportsbook revenue. The Super Bowl was a big factor as New Jersey surpassed Nevada for monthly handle. Now the Garden State is looking expand the local sports betting market by bringing the rapidly growing esports industry into the fold.
Newzoo, which is a data analytics firm, recently said that the worldwide revenue from esports in 2019 was over $1 billion. Business Insider Intelligence predicts that the viewership of esports will reach 646 million people by the year 2023, which is a compound yearly growth rate of 9%. Also, technology giants such as Microsoft, Apple, and Google are competing with each other to get a lion’s share of the market for live streaming of esports events.
The Chinese company Tencent is the largest esports business the world over, as it has generated over $20 billion from the professional gaming industry. Sony is not far behind, while Google and Activision Blizzard have partnered up to host events in the cloud. Now the US gambling industry wants in on the action.
Recently legislators in New Jersey introduced a bill that would make wagering on esports legal. However, there are some exceptions, as the esports events cannot be in congruence with a high school and there cannot be competitors in the events that are under 18 years of age.
If the bill passes into law, it would further the definition of what a sporting event is according to New Jersey’s sports betting legislation. It would also open the door for wagering on any attraction that is based on skill, such as award shows and even eating contests of a competitive nature.
New Jersey’s first foray into esports betting came during the finals of the 2019 League of Legends World Championship, where the NJ Division of Gambling Enforcement allowed licensed sportsbooks to take bets under a strict set of guidelines.
The bill has support, as many believe it will greatly help the Atlantic City gaming industry. New Jersey was at the forefront when it came to gambling online thanks to FanDuel and DraftKings, which are partnered with Meadowlands Racetrack and Resorts Atlantic City, respectively. Both FanDuel and DraftKings recently filed for an initial public offering (IPO) and those two companies make up 80% of the New Jersey online gambling market due to their partnerships with land-based casinos.
FanDuel controls 60% of the market share as the biggest sportsbook in the United States, while five of the 10 New Jersey sportsbook operators had a January sports wagering revenue that reached seven figures. If the law to legalized esports betting passes, the thought is that millennials would be more attracted to wagering at the casinos in Atlantic City.