After a decade of annual declines, New Jersey’s casino industry posted revenue gains in each of the last two years. Extending the streak to three years is going to be a tough lift, as the first two months of 2018 have been nothing to write home about.
Not including online gambling, casino revenue was down 12.6 percent in January and 8.9 percent in February. That works out to a 10.8 percent decline compared to the first two months of 2017.
Solid growth on the online casino side of the ledger helped reduce that number to 8.2 percent, but January and February have presented New Jersey with a difficult deficit.
So what exactly happened to cause the pronounced revenue decline? Here are a few of the most likely culprits.
The weather didn’t cooperate
Weather wreaked havoc up and down the East Coast in January, including in Atlantic City.
A powerful Nor’easter (with the ominous moniker of a “bomb cyclone”) shut down the city for more than a day in early January. Plus, Atlantic City saw more snow on the 17th and 30th of the month.
Weather was better in February, but there was quite a bit of precipitation, including some snow at the beginning of the month.
Did an Eagles win lead to an Atlantic City loss?
The bomb cyclone isn’t enough to cause the declines Atlantic City experienced. To further explain the declining revenue, we’ll need to look at another act of god: the Philadelphia Eagles’ improbable run to a Super Bowl title and the subsequent victory parade.
The Super Bowl and day after, as well as the parade day, likely sent a lot of New Jersey-based Eagles fans to Philadelphia and kept them out of Atlantic City casinos.
Maybe, I don't know if viewership was way up in the AC area simply b/c Eagles were in bowl, but possible there was a material increase. Parade possibly bigger impact. FWIW I think 6.5% is just outside of normal fluctuations.
— Robert DellaFave (@RobertDellaFave) March 15, 2018
2017 was all right
Part of the problem was definitely weather. The Super Bowl and the Eagles’ parade may have also cost Atlantic City casinos some revenue. But there’s also a third, more mundane factor: the first two months of 2017 were pretty good.
Atlantic City casino revenue was up 5.9 percent in January 2017 (7.7 percent if you include online gaming). Then, February saw a slight decline of 1.8 percent in land-based casino revenue, but factoring in online gambling, revenue was up 0.3 percent.
Chalk it up to normal fluctuations
Even in periods of growth, it’s not unusual for casino revenue to ebb and flow throughout the year.
Jackpots, special promotions, and outside factors like the ones listed above can all cause revenue spikes and dips.
In 2017, land-based casino revenue was up and down throughout the year, with three changes of at least four percent, and two months of about six percent:
- January 2017: +5.9 percent
- February 2017: -1.8 percent
- March 2017: +6.7 percent
- April 2017: -3.6 percent
- May 2017: +2.5 percent
- June 2017: No change
- July 2017: -4.1 percent
- August 2017: -2.7 percent
- September 2017: -2.4 percent
- October 2017: -.03 percent
- November 2017: +3.2 percent
- December 2017: -1.8 percent
The declines in January and February 2018 were pronounced. But if changes up to six percent constitute normal fluctuations, the 12.6 percent and 8.9 percent declines aren’t as severe as they first appear.
This is even truer if weather, the Eagles’ Super Bowl run, and being up against 2017’s solid January and February numbers are thrown into the mix.