New Jersey hotels have seen increases across the board after sports gambling was legalized in the state in 2018.
HENDERSONVILLE, Tennessee—Since 2018, seven states (Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania and Rhode Island) have legalized sports gambling. In addition to these states, 38 states currently have some sort of sports betting bill in the works, with some states expecting the bills to be passed or signed within the next few months.
According to the New Jersey Division of Gaming Enforcement, between June 2018 when sports wagering was legalized and year end, New Jersey sportsbooks generated more than $94 million in revenue. As of April, they have already made an additional $84 million in 2019. With the 8.5% sports wager tax, the state collected $3.4 million in revenue last year, as well. In 2019, nearly $1.4 billion of sports bets have been placed on-site and online.
Not only has the passing of this bill profited the state as a whole, it also has had an impact on the hotel industry. Since June 2018 when Gov. Phil Murphy signed the sports betting bill, New Jersey has seen an average increase in of 3.7% in monthly demand, well above the total U.S. demand increase of 2.3% during this same period, according to STR. New Jersey has also seen average daily rate growth of 6.5% compared to the tepid 1.8% average increase for the total U.S. (STR is Hotel News Now’s parent company.)
While this bill did legalize gambling statewide, the Atlantic City, New Jersey, submarket saw an instant impact when the Borgata Hotel Casino & Spa began accepting its first bets. Since then, seven additional Atlantic City casinos have opened sportsbooks and begun accepting sports bets. June 2018 demand in Atlantic City was up 27% over June of the previous year, and the market has seen double digit demand growth every month since.
With the increase in demand, Atlantic City has experienced ADR growth during this period as well. Between June 2018 and April 2019, the market has seen ADR growth of 36.1%, resulting in revenue per available room growth of 33.8%. Prior to June 2018, Atlantic City market ADR had fallen an average of 1.8% from 2010 to 2018. Revenue in the market also grew 70% year over year. June, July and August 2018 represented the highest three-month period of revenue in the market’s history, with more than $213 million in rooms revenue.
Other states considering bills to legalize sports gambling include Iowa, Indiana, Tennessee and Montana.
Ryan Lynch is a business development executive in STR’s Industry Partners division.
This article represents an interpretation of data collected by STR, parent company of HNN. Please feel free to comment or contact an editor with any questions or concerns.