Where’s My Receipt? Fertitta May Need To Return Rockets To Have NJ Sports Betting

Marc Meltzer June 6, 2018 728 Reads
NJ Sports Betting

Golden Nugget owner Tilman Fertitta stepped in something when he purchased the Houston Rockets in 2017. Whether he stepped in something good or bad is unfolding before our eyes. Despite the crossover potential of the two businesses, casino ownership and sports franchise ownerships don’t mix perfectly.

Since sports gambling has become a legal state issue, there will be different laws for sports gambling in every state across the country. Right now it appears as though the states will take a different approach to sports team ownership and sportsbook operations. Take a look:

  • Golden Nugget Las Vegas and Laughlin do not take bets on Houston Rockets
  • Golden Nugget Atlantic City may not be able to operate a sportsbook at all
  • Golden Nugget Biloxi and Lake Charles could come under scrutiny in Mississippi and Louisiana, respectively.

You may remember last year that the Golden Nugget was asked to take the Houston Rockets off the board at their Nevada sportsbooks. The Nugget was still allowed to book the rest of the NBA teams and all other sports for that matter. Well, New Jersey may be a little more strict about sportsbook operators also owning professional sports franchises.

PlayNJ.com got its hands on the proposed sports betting bill for New Jersey. In brief, casino owners may not own more than ten percent of a professional sports franchise.

If this bill becomes law as it’s proposed, then the Golden Nugget will not be able to take sports wagers in Atlantic City. Let’s take a look to see if this is a big deal for the owner of both the casino company and NBA team.

Houston Rockets valuation and revenue

According to Forbes, the Houston Rockets franchise had a valuation of $2.2 billion in February. Forbes and Statista report the Rockets generated $296 million in revenue for the 2016-2017 season. Revenue for the Rockets has been on the rise since the 2013-2014 season. That should continue with the great season the team just finished.

New Jersey sports betting revenue estimate

Golden Nugget is potentially a single outlet for sports betting in New Jersey. Below are a few statewide sports betting revenue scenario estimates by Eilers & Krejcik Gaming in a mature NJ market:

  1. Estimated annual revenue if sports betting is limited to land-based outlets – $251 million.
  2. Estimated annual revenue from land-based and restricted online sports betting – $324 million.
  3. Estimated annual revenue from land-based and full online sports betting – $502 million.

It’s difficult to say how what share of the sports betting market will belong to Golden Nugget in New Jersey since sports betting will be available beyond casinos. According to revenue reports the Golden Nugget was fifth of eight brick and mortar casinos. Their online casinos had the most revenue any ownership group in New Jersey.

So now what?

There are a lot of potential scenarios for the Golden Nugget in New Jersey. Will Fertitta sell the Rockets so the Golden Nugget can take bets on sports in New Jersey? Will the Golden Nugget just pass up the potential revenue from sports betting in New Jersey because they own the Houston Rockets?

The finances don’t seem to line up for a sale of the Rockets…right now. That might be something to consider if Mississippi and Louisiana were to take a similar stance as New Jersey regarding casino and sports franchise ownership.

In any event, things seem problematic right now for Fertitta in NJ, unless the bill is changed.