Two weeks ago, Governor Chris Christie signed the bill making sports betting legal in the State of New Jersey at casinos and racetracks. While a federal judge issued a temporary restraining order, which prevented wagering this past weekend, our government is obviously trying to reap the tax benefits, create jobs and save Atlantic City.
I think this is a losing bet.
While the idea of sitting in a sports bar on a football Sunday or during the first few days of the NCAA Tournament and having the ability to legally place a bet is appealing, it’s not unique. While online sports gambling is currently illegal, for many, it’s not only something gamblers are accustomed to. It’s convenient.
Online and mobile gambling hasn’t taken off in the way that many thought it would, and is, therefore, not the cash cow that the state expected from a tax standpoint. If online gaming didn’t change people’s gambling habits, what will compel someone to leave their long time bookie or favorite online site in favor of actually getting up off of the couch, traveling to the nearest racetrack or casino, and handing someone actual money to place a bet?
It’s not dissimilar to any other market disruption. It will have to either be a better experience or less expensive. Since I don’t see a way for it to be cheaper, the sports books will have to offer something that gamblers can’t get by sitting in their living rooms for this program to be successful.
Celebrity events, big games, creative gambling opportunities and a crowd mentality will help draw people to Atlantic City and other gambling venues. Personally, I look forward to spending the first day of the NCAA Tournament in Atlantic City in March. However, I did that last year.
There’s a reason that the sports books in Las Vegas are packed for the Super Bowl and other big events. Anyone that thinks that simply opening the doors in Atlantic City will have the same result isn’t paying attention.
Sports betting won’t be the lifeline to Atlantic City that some politicians predict. Figuring out how to disrupt people’s habits and changing an industry is the key to success. Isn’t it always?
I do think there are jobs that can be created and tax revenue for the state to collect. However, I think that it will look differently than the politicians predict. I think it will come from online wagering that looks similar to those illegal sites currently in place. After all, if they are exactly the same, why wouldn’t someone choose the legal route?
So, with reference to past entries on this blog about the desperate state of Atlantic City in terms of casino closures and lost revenue, I think if they’re looking at this new bill as the proverbial light at the end of the tunnel, they’ll be sorely mistaken once again.
By: Jeremy Neuer
Senior Vice President | CBRE
Jeremy Neuer is a Senior Vice President with CBRE in the East Brunswick, NJ office. He specializes in office leasing throughout New Jersey and also represents several large corporations on a national basis.
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