Sports Business Report: NJ Sportsbooks Post $1.2 Million in June Profits, Meadowlands Sportsbook Opens Tomorrow
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NJ Sportsbooks Post $1.2 Million in June Profits, Meadowlands Sportsbook Opens Tomorrow
The Division of Gaming Enforcement reported that New Jersey sportsbooks took in more than $16.4 million in bets between June 14th-30th, realizing +/- $1.2 million in “clean revenue” (+/-$3.5 million total) over the 17-day span; an impressive figure considering the limited rollout (see Howie below), no mobile/online wagering (due to start July 11th) and just over 2 weeks of operations. The remainder of the +/-$3.5 million revenue total ($2.25 million) accounts for futures bets that have yet to be paid out and winning tickets unclaimed as of June 30th. For comparison purposes, NJ took in over 2x as much money in bets as Delaware ($7 million) did in June – in 3 fewer days.
Howie Long-Short: +/-$1.2 million in “clean revenue” equates to a 7.8% hold, higher than the 5.5% Nevada has averaged dating back to ’92, but significantly below the 14% Delaware reported in June. As Dustin Gouker, Managing Editor of Legal Sports Report, told us earlier in the week, “it’s too early to read too much into the hold. It’s a small sample size and it may simply be lots of bettors that are not terribly savvy, trying to figure out wagering.”
Monmouth Park, operated by William Hill (WIMHY), was responsible for 65% ($2.279 million) of the revenue generated at N.J. sports books in June. The Borgata in Atlantic City brought in just shy of $1 million in profits (28.5%), while Ocean City Resort ($192,000) earned the balance in just 3 days.
The State of New Jersey took in less than $300,000 in taxes, with a land-based casino tax rate of 8.5%; prorated that’s $7.2 million/year. While that figure sounds low (some lawmakers have estimated the state would generate $100 million/annually), consider that just 3 of the state’s 12 potential licensees (9 casinos, 3 horse tracks) are currently operating. Furthermore, licensed operators will soon be able to offer mobile/online betting. It’s expected that “as the market matures”, most of the revenue will come those channels; the state is entitled to a 14.25% tax on those profits.
Fan Marino: The FanDuel Sportsbook at Victory Sports Bar & Club, located at the Meadowlands Racetrack, is holding a soft launch tomorrow morning (July 14th, at 11a). The property should quickly become the state’s most profitable sportsbook, with 15 million people living within 20 miles of the venue and no real competition expected before the end of March Madness ‘19. Remember, Irish bookmaker Paddy Power Betfair (PDYPY) acquired majority ownership (61%, grows to 100% in 5 years) in FanDuel back in May; the deal closed earlier this week.
MLB Suspends “Papa Slam” Promotion, Stock Spikes +11% Following Papa John’s Resignation
Less than 24 hours after Papa John’s Founder John Schnatter admitted to using a racial epithet (and spewing other offensive comments) during a corporate training exercise, Major League Baseball announced it had indefinitely suspended its league-wide “Papa Slam” promotion with Papa John’s Pizza (PZZA). The suspension will not impact individual team promotions with the national pizza chain, though some (see: Marlins, Royals) have moved to follow the league’s decision. The “Papa Slam” promotion entitles baseball fans to 40% off their next order at Papa John’s for each grand slam (aka Papa Slam) hit; Greg Byrd’s grand slam on Wednesday evening was not acknowledged by MLB as a “Papa Slam”. Schnatter has since stepped down from his role as Chairman, he’s also resigned his seat on the Board of Trustees at the University of Louisville.
Howie Long-Short: This isn’t the first time Schnatter has made headlines for the wrong reasons. He stepped down from his role as CEO last fall after blaming lagging sales on declining NFL viewership and the league’s handling of player protests. PZZA shareholders are clearly relieved he’s no longer running the company because aside from being a liability, North American same store sales (-5.3% YoY) and revenue (-4.9%) declined for the 2nd consecutive quarter in Q1 ‘18. Shares soared +11% on news of his resignation Thursday, closing at $53.67. Even with Thursday’s spike, the stock price is down is down 28% over the last 12 months; Pizza Hut shares are up 31% over the same period. That’s because despite PZZA’s tumultuous year, pizza remains a “strong growth category within the food and beverage industry.”
Fan Marino: Did you know? According to FranchiseOpportunities.com, Papa John’s has the 2nd most locations (14) amongst food chains in U.S. pro sports venues; Dippin Dots has 21 locations. 4 of the 14 venues are NFL stadiums.
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