A Closer Look At The Numbers: Online Gaming Revenue Fills The Coffers Of NJ Casinos

Posted By Steve Ruddock on May 22, 2018

The first four months of 2018 haven’t been overly kind to Atlantic City casinos. NJ land-based casino revenue declined 6.1 percent compared to the same four-month period in 2017.

One bright spot has been New Jersey online gambling.

Online gaming set new monthly revenue records in three of the first four months of 2018 — April was the industry’s second best month historically but fell shy of besting March’s tally.

Online gaming’s hot streak helped offset the land-based revenue dip, and when online revenues are included, the YTD Y/Y gaming revenue decline drops to just 4.1 percent.

Online gaming an increasingly larger piece of the pie

It was big news when NJ online gaming’s share of total casino revenue eclipsed 10 percent of total casino revenue toward the tail end of 2017.

Online gaming’s share of the revenue pie has ticked up even further in 2018.

As a percentage, online gaming represented a full 12 percent of total gaming revenue in April. Its percentage was even higher in January, February, and March when it constituted no less than 13 percent of all gaming revenue.

Online gaming is a bigger deal for some casinos

Not every casino has the same reliance on online gaming. The percentage of revenue generated online varies by operator.

For instance, Golden Nugget has turned online gaming into a massive source of revenue, with online accounting for more than 40 percent of all gaming revenue in April. It’s safe to say that Golden Nugget AC would be in a very different financial situation were it not for online gaming.

On the other hand, online revenue accounts for less than five percent of the total gaming revenue generated by Caesars three AC casino properties.

But it’s not just the little guys that are benefitting from online gaming. Even the strongest land-based casino in the market, Borgata, now derives more than 8 percent of its total gaming revenue from online gaming.

These breakdowns were unimaginable when the industry launched less than five years ago.

Here’s a look at online gaming’s percentage of total revenue broken down by operator in April.

Is online gaming behind Atlantic City’s turnaround?

After peaking in 2006, Atlantic City’s casino industry went through a well-documented, prolonged period of decline. Total gaming revenue declined each and every year for nine consecutive years, with an average decline of 7.5 percent.

The downswing mercilessly came to an end in 2016. And it shouldn’t be too surprising to find that online revenues appear to have played a big part in the revenue bumps of 2016 and 2017.

As the chart below demonstrates, online revenues are growing by leaps and bounds and pulling total gaming revenue along for the ride.

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Steve Ruddock

Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus is the developing legal and legislative picture for regulated US online poker and gambling.

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