[toc]Don’t look now, but New Jersey’s online gaming industry is about to celebrate its fourth birthday. After a bit of a rocky start, the New Jersey online gaming industry has been a runaway success, and is showing no signs of slowing down.
Even four years in, online casino revenue is growing by 20-30 percent each and every month.
More importantly, online gaming isn’t cannibalizing land-based gaming.
In fact, an argument could be made that land-based revenue has been drafting in online gaming’s wake.
The revenue being generated online has been incremental, and has trickled down to Atlantic City’s land-based properties, evidenced by the industry’s first year-over-year revenue increase in a decade in 2016. AC casinos are on pace for another Y/Y revenue increase in 2017. Thanks in large part to the continued growth of online gaming.
Online gaming is key to growth
Not surprisingly, Atlantic City’s casinos have become more and more reliant on online gaming.
Industry-wide, online gaming was responsible for 10 percent of gross gaming revenue in October.
But it wasn’t always this way.
2014: A slow start
In January 2014, New Jersey’s online gaming industry was still in its infancy, but even then, despite some early issues, it was already paying dividends.
With just two months under its belt, online gambling was already accounting for close to five percent of all casino revenue generated in Atlantic City.
By the end of 2014, online gaming’s market share had grown to 5.6 percent.
2015: Everything starts to come together
With most of the early problems worked out, online revenue continued to grow, as did its market share.
2016: The first sign of what online gaming is capable of
As the industry matured, online revenue continued to grow.
By the end of 2016, online revenue accounted for 8.8 percent of all casino revenue, and even in the summer, when Atlantic City casino revenue explodes, online gaming revenue was still accounting for 6.3 percent of GGR.
2017: All engines go
2017 saw online as a percentage of total gaming revenue peak at 10 percent in October. That percentage will likely go up in November and December).
To emphasize how far the industry has come, note that the floor in 2017 was July, when online gaming accounted for 7.7 percent. That’s a higher percentage that any month in 2014 or 2015.
What operators are benefitting the most?
The importance of online gaming is even easier to see on a per operator basis.
A total of 25 percent of Golden Nugget’s gross gaming revenue was generated online in October. That number was 30 percent in September.
At Resorts Casino, an impressive 23 percent of all casino revenue comes from online gaming.
At Tropicana online gaming accounts for 12 percent of all casino revenue.
Even Borgata, a casino that dominates the land-based market, derives six percent of its GGR from online gaming.
Caesar’s percentage may look small, but that’s only because there are three Caesars’ properties in the market.
Anyway you slice it, online gaming is a big piece of the Atlantic City revenue pie.