New Jersey has rapidly become a US sports betting mecca, rivaling or even topping Nevada in some months when it comes to total handle. Now, the Garden State could be looking to esports to expand on those successes.
On Monday, Assemblyman Ralph Caputo (D-Essex) introduced a bill that would amplify the competitions bettors can invest in to encompass non-traditional skill games, including esports.
The Garden State already had a flirtation with esports wagering. Last November, the New Jersey Division of Gaming Enforcement (DGE) permitted the state’s sportsbook operators to take action on the League of Legends world championship.
When the state approved sports wagering in 2018 following the Supreme Court ruling on the Professional and Amateur Sports Protection Act (PAPSA), the initial law appeared to bar esports betting. That language was later clarified to allow wagering on video game tournaments, but only on competitions where all the participants are at least 18 years old.
Caputo, a former Atlantic City gaming executive, is proposing legislation that would bring esports under the same rules and regulations as more traditional fare, such as basketball and football. The financial implications of making betting on gaming tournaments more readily available are potentially significant.
Esports has the potential to meaningfully impact the global sports betting industry, as esports represents one of the fastest-growing betting markets – and sports – globally,” said Roundhill Investments CEO Will Hershey in an interview with Casino.org. “Per VentureBeat, esports wagers totaled approximately $8 billion in 2019. That number is expected to double over the coming years.”
Roundhill is the company behind the Roundhill Bitkraft Esports Index and the issuer of the Roundhill BITKRAFT Esports & Digital Entertainment ETF (NYSE:NERD), a fund dedicated to publicly traded esports and video game companies.
Sought After Demographic
New Jersey’s foray into possibly offering esports wagering on a regular basis could prove fruitful when it comes to enticing younger gamblers, a demographic the traditional gaming industry is struggling to connect with.
“Esports also represent a way for sportsbooks to connect with a young (predominantly 18-35 male), affluent demographic,” said Hershey. “This attractive demographic is also expected to grow — esports viewership based is expected to grow from 454 million in 2019 to 645 million in 2022.”
It would be a practical move for New Jersey, because data suggest that in any given month, $8 or more of every $10 wagered on sports there is placed via mobile devices, underscoring the point that many Garden State gamblers are embracing technology.
Esports revenue and television viewership is surging, potentially laying a foundation for a more vibrant wagering industry related to video game tournaments. By some estimates, esports TV viewership will exceed that of all the major domestic sports leagues except the NFL by 2022.
There’s another carrot dangling in front of revenue-hungry operators and states on the esports front: increased opportunities for prop betting.
“Esports betting also allows for potentially more sophisticated – and profitable – live prop betting,” said Hershey. “Because of games’ digital nature, sportsbooks are equipped with immense amounts of data (in real-time) to continually engage their audience.”