Online gambling was a great unknown when it launched in New Jersey back in November 2013. Some casinos weren’t sold on its benefits and decided to pass on online gambling. That’s a decision those casinos would soon regret.
At the time, four of Atlantic City’s 12 casinos said no to NJ online casinos. Three of those casinos were closed within a year.
- Atlantic Club
NJ online gambling isn’t the cause of their demise, but their reluctance to embrace online gambling was certainly a contributing factor.
Online gaming is no longer an option, it’s a necessity
In 2018, if you’re an Atlantic City casino operator you simply have to offer online gambling. It’s a must-have amenity like a rewards program. It’s baked into the cake.
Not surprisingly, every active casino operator in the Atlantic City market is involved in NJ online gambling.
The only Atlantic City casino without an official online gambling presence is Bally’s. But even Bally’s has links to online gambling. Bally’s is one of three Caesars-owned AC casinos, and its two sister properties, Harrah’s and Caesars, both have branded online casinos (Harrah’s online casino and Caesars online).
That said, not every casino operator views online gambling with the same fervor, or dedicates the same resources to promoting their online gambling websites.
Online offers a level playing field
The city’s smaller casinos have strategically used online gambling as a way to level the playing field against the MGMs and Caesars of the market. This keeps their heads above water in the extremely competitive market.
A full 20 percent of Resorts casino revenue has been generated online in 2018. That’s nearly double the industry average (as seen in the chart below).
Resorts was the first property to have a dedicated space on-property, the iGaming Lounge, devoted to online gambling. Resorts was also an early adopter of virtual sports and the only online casino offering the DFS hybrid game, FastPick.
Golden Nugget is even more reliant on online gambling. As the overwhelming online casino market leader, Golden Nugget generates more than 30 percent of its revenue online.
Again, it shouldn’t be surprising to learn that Golden Nugget was the first New Jersey online casino to offer live dealer games, or that Golden Nugget has the largest selection of slots and table games in the market.
Simply put, without online gambling, Golden Nugget and Resorts might very well have been caught up in the wave of casino contraction that swept through Atlantic City from 2014-2016.
But that doesn’t tell the whole story
Resorts had to overcome its small physical size and lesser-known brand to compete with the big boys online, but a big reason Resorts generates 20 percent of its revenue online is because it doesn’t generate nearly as much land-based casino revenue.
Resorts is in the middle of the pack when it comes to YTD NJ online casino revenue:
- Golden Nugget: $58,313,026
- Borgata: $30,793,152
- Resorts: $26,435,432
- Caesars: $25,692,515
- Tropicana: $23,845,335
So, even though Borgata and Caesars are well below the industry average in terms of percentage of revenue generated online, that’s only because they generate so much revenue at their brick-and-mortar casinos.
On a dollar-for-dollar basis, the online offerings at Borgata, Caesars (including Bally’s and Harrah’s), and Tropicana are pretty much even with Resorts. They simply crush Resorts when it comes to land-based revenue.
As the chart below shows, every online operator not named Golden Nugget has generated roughly the same amount of revenue. The differences in revenue percentage generated online is in land-based revenue.
Land-based market share vs. online market share
A top-level look at the online markets shows Golden Nugget reigning supreme in the online sector, boasting a 36 percent market share.
The land-based AC casino sector is similar with two companies dominating the market:
- The three Caesars properties and their combined 35 percent market share.
- Borgata with its 30 percent market share.
But both markets look demonstrably different when they’re broken down into individual casinos and online brands.
Online, Golden Nugget is still the top operator. However, the trail pack is not only larger, it’s significantly closed the gap on Golden Nugget.
On the land-based side of the ledger, things really change when the three Caesars casinos are separated. Borgata becomes the sole market leader, with everyone else straining their necks looking up at the MGM property.