Atlantic City Casinos Keep Getting A Little Friendly Help From Online Gambling

Posted By Bart Shirley on June 20, 2019

A new report from the American Gaming Association (AGA) details the decline and ascent of New Jersey gambling revenue. From 2006-14, Atlantic City casino revenue was in a state of decay.

More or less, land-based revenue at New Jersey casinos has hovered around $2.5 billion annually since 2014. Since its nadir in 2015, the amount has slowly drifted back above that mark.

The good news from the AGA report is that online casinos are bolstering the land-based revenue, and everyone is trending upward.

In a vacuum, stable industry revenue is not necessarily a bad thing. However, given the trials and tribulations that Atlantic City has suffered, the online section has certainly worked to keep the land-based casinos in good standing.

In fact, there are two big reasons why NJ online casinos are helping to buttress the land-based casino trend.

Steady revenue occurring with online influence

To be clear, land-based casino revenue is trending slightly upward in New Jersey. It’s certainly better than seeing revenues decline, as they did in the decade before 2016.

However, the slight rise in revenues is occurring alongside the launch of online gambling. Since 2013, New Jersey casinos have rolled out dozens of casino and sportsbook apps to appeal to a broader audience.

Both of those ventures have been successful, at least on their terms. Online casinos in New Jersey have realized revenues north of $1.1 billion since its inception. NJ sportsbooks are already seeing revenues approach $200 million in a year of operation.

Between 2009 and 2015, however, Atlantic City casinos saw a reduction in annual revenues of around $1.5 billion. In terms of percentages, the decrease was roughly 38%.

The shuttering of four properties in 2014, followed by a fifth in 2016, certainly contributed to the revenue decline. But the casino industry was on a downturn even before the closures as neighboring states boosted their gambling industries.

aga casinos new jersey revenue 2018
Courtesy of American Gaming Association “State of the States” report

One variable that arrested the decline was the introduction of online gambling. The information in the AGA graphic above shows as much, with declines slowing in 2013-15, then turning into growth afterward as the online market solidified.

So, even though things are coming back for land-based properties, that resurgence likely has a lot to do with iGaming.

The effects of a changing AC casino industry

The other reason that land-based casinos can tip their hat to the online market is the fact that Atlantic City has seen so much change.

In the last decade, there have been as few as seven and as many as 12 casinos active in America’s Playground.

Two new casinos opened their doors in June 2018. However, the debuts of Hard Rock Atlantic City and Ocean Resort Casino (now Ocean Casino Resort) did not precipitate sharp permanent spikes in casino revenue.

And, while the two casinos provided a renewed interest in the resort town, the result for the market was mostly a redistribution of revenue.

In the first quarter of 2019, almost all of NJ’s casinos saw a revenue dip compared to the previous quarter. The exception to that was Borgata. Overall, however, the industry saw a revenue increase in the first quarter of 2019 of 17%.

So, it’s possible the return to growth is not solely due to excitement from AC visitors.

The close ties of online and land-based gambling

If anything, one of the main takeaways from the AGA’s report is how it illustrates the intertwined nature of land-based and online gambling.

New Jersey’s casinos might be in big trouble without the online component. Once online gambling found its footing in mid-2015 and the casinos themselves stopped closing shop, online casinos provided a much-needed boost.

Add to this a new channel of online gambling, aka sports betting, and the future for AC casinos seems very bright.

Perhaps the report can serve to inform other state legislatures who are toying with the idea of introducing online casinos.

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Bart Shirley

Bart Shirley is a writer and poker player from Houston, Texas. When he's not teaching high school math and business, Bart writes about the NJ online casino industry and US online poker. He has a master's degree in business administration from Texas Christian University and a degree in English from Texas A&M.

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