On paper, February looks like a middling month for the New Jersey online gambling industry.
Online casino and poker revenue fell from an all-time high of $33.6 million in January to $31.7 million in February. Online sports betting revenue tumbled even farther, falling from $15.5 million to $12.9 million month-over-month.
But looks can be deceiving.
Y/Y and per-day comps tell a different story
With three fewer days than January, the condensed month of February is always an outlier. The reduced top-line numbers lead to plenty of false conclusions.
Case in point, February’s year-over-year comps for retail casino and online casino revenue are incredibly strong.
How strong? They were some of the strongest to date.
Online gambling revenue posted a 44 percent Y/Y increase, while total casino revenue jumped 15.7 percent. Combined total gaming revenue (a combination of sports betting, online gambling, and retail gambling) rose 25.6 percent Y/Y.
Further, on a per day basis, February’s NJ online casino revenue number was stronger than January’s:
- January 2019 per-day online gambling revenue: $1,083,690
- February 2019 per-day online gambling revenue: $1,133,883
Top line numbers
Here are the top line numbers from the New Jersey Division of Gaming Enforcement’s latest monthly revenue reports.
Revenue by vertical:
- February 2019 online casino revenue: $29,938,129
- February 2019 online poker revenue: $1,810,597
- February 2019 online sports betting revenue: $12,851,283
- February 2019 total online gambling revenue: $31,748,726
- February 2019 total online gambling revenue w/sports: $44,600,009
Sports betting driving recent surge in NJ online casino revenue
Cross-selling is real. Since the launch of online sports betting in New Jersey, online gambling revenue has been growing at an astronomical rate.
More evidence of the power of cross-selling can be seen in the quick ascension of the DraftKings online casino.
In just a few months, DraftKings casino is already one of the top performers in the state. It’s managed that by marketing its casino games to its strong NJ sports betting customer base.
According to Eilers & Krejcik Gaming, DraftKings online casino revenue is already around $2.5 million per month.
Online casino key takeaway
Online casino growth has averaged 46.6 percent since November, and it’s hard to attribute this recent surge to anything other than the addition of sports betting.
Online poker key takeaway
Online poker revenue seems to have found a plateau. For the first time in a long time, online poker revenue rose (by just over two percent) in February.
Online sports betting key takeaway
Sports betting’s “down” month was a combination of two things:
- Bad results on the Super Bowl for the sportsbooks.
- Overestimating how many people would travel to Atlantic City casinos for the Super Bowl.
There was some hope New Jersey (and other states) could replicate Nevada’s appeal as a sports betting destination, but that clearly wasn’t the case for the Super Bowl.
Because of its high variance, we’re treating online sports betting as a separate entity, and it won’t be included in the analysis below.
Here’s a look at the Y/Y changes:
- Online poker: +2.12 percent
- Online casino: +48.07 percent
- Total revenue: +44.36 percent
As seen in the chart below, the NJ online gambling industry has yet to experience a year-over-year decline in any month (this chart doesn’t include sports betting revenue).
Casino by casino analysis
Borgata hanging on for its life
- License holder: Borgata
- Brands and sub-brands: Borgata, Party, Pala, playMGM
- Market share: 14.2 percent
With the emergence of Resorts (thanks DraftKings), Borgata is now the number three online casino operator in the market. And with a surging Caesars bearing down on it, Borgata is barely holding on to the number three spot.
Golden Nugget stays above $10 million in a short month
- License holder: Golden Nugget
- Brands and sub-brands: Golden Nugget, Betfair, SugarHouse
- Market share: 33.7 percent
Golden Nugget fell well short of the record it set in January, but it’s still the top NJ online casino site in the market by a country mile.
That said, Golden Nugget is looking over its shoulder at the rising Resorts casino, which has leveraged strong online sports betting sites to maximum effect.
Tropicana is who we thought they were
Tropicana’s online casino revenue continues to hover right around $3.5 million.
Unlike its peers, Tropicana hasn’t been able to grow with the market and is falling further and further behind the likes of Golden Nugget, Resorts, Borgata, and Caesars.
Resorts posts back-to-back $6 million months
- License holder: Resorts AC
- Brands and sub-brands: Resorts, Mohegan Sun, PokerStars NJ, DraftKings casino
- Market share: 21 percent
Momentum. That’s the best way to describe Resorts’ online casino performance.
Online casino revenue was above $6 million for the second consecutive month, a feat made all the more impressive considering February has three fewer days than January.
Caesars’ hot streak continues
- License holder: Caesars
- Brands and sub-brands: 888, Caesars, Harrah’s, WSOP
- Market share: 13.5 percent
Caesars was the most volatile online casino for years. It was the anti-Tropicana, with revenue bouncing around with no rhyme or reason.
However, Caesars seems to have found its footing of late. Revenue has been consistent for several months, falling between the $4 million – $5 million range.
Hard Rock’s online casino ready to take the next step
- License holder: Hard Rock Casino
- Brands and sub-brands: Hard Rock
- Market share: 5.3 percent
Slowly but surely, Hard Rock has emerged as a serious player in the New Jersey online casino market.
Hard Rock is quickly approaching its first $2 million month, and it looks destined to be on equal footing with the likes of Caesars, Borgata, and Tropicana by the end of the year.
Ocean Resort is struggling
- License holder: Ocean Resort Casino
- Brands and sub-brands: Ocean Resort
- Market share: 1.5 percent
It’s hard to argue that Ocean Resort Casino is anything but an abject failure, and its survival in the highly competitive Atlantic City market is an open question.
As disappointing as the land-based casino has been, Ocean Online Casino has to be even more disappointing considering how quickly Hard Rock (launched at the same time) has gained market share.
Historical look at iGaming revenue in NJ