Here’s What Makes 6 Years Of NJ Online Gambling Something Worth Celebrating

Posted on November 21, 2019

The night of Nov. 21, 2013, is one of that Yaniv Sherman will never forget.

The head of group commercial development at 888 Holdings was in Tel AvivIsrael, at the time, watching New Jersey online casinos launch at around 1 a.m.

Israel is where 888 tech operations were based. Gibraltar was the operational hub. So, those two international offices were working in tandem with NJ.

“There were dozens of people in a room near Tel Aviv in the middle of the night. … I think I have footage from that event. We had American flags hung up everywhere,” said Sherman.

“It was really a celebration because everybody understood the importance of and the strategic meaning of that day.”

Fast-forward to 2019, and the NJ online casino industry is celebrating its sixth anniversary.

Sure, things started on a small scale with just 13 online casino and poker platforms. But it has grown into something much, much bigger.

How will the 2019 market of 40+ gambling sites react to new competition and an expanding US market? Yes, it has had a six-year headstart. But figuring out what’s next is not as easy as you might think. And may not be the right question to ask.

The numbers tell a very successful story

If we go back to December 2013, the first full month of NJ online casino operations, initial revenue came in at $7.4 million. That was pretty great back then, but still, it’s pennies compared to the numbers that drop on a monthly basis a half a dozen years later from the Division of Gaming Enforcement.

For instance, in July 2018, prior to the launch of NJ online sports betting, revenue for online casinos came in at $25.8 million. And ever since the August launch of DraftKings Sportsbook, those numbers have steadily been ticking upward.

The online casino and poker industry is now at the point where the seven license holders are reporting record revenue all the time.

This includes October’s when internet gaming revenue came in at $45.2 million. Besides being a 69% year-over-year increase, it topped the previous month’s record of $41.1 million. Now, add in online sports betting ($38.7 million), and you have a market that hit more than $80 million in revenue — in just one month.

Who would’ve thought that one day, online revenue would surpass land-based casino win? But this was the October story at two Atlantic City casinos.

Golden Nugget, the online market leader, reported a casino win of $14.7 million while online revenue came in at $16.6 million.

Over at Atlantic City’s oldest casino, Resorts AC, the property earned $12.1 million from players. However, Resorts Digital, which is a combination of mobile casino and sports betting revenue, reported $20.8 million in revenue (about half of which came from online casino apps).

So, the numbers themselves do not tell of any upcoming danger.

NJ online gambling: 2013 vs. today

Of course, there are obvious differences between 2013 and 2019. For one, there is a significant cross-selling opportunity between casinos, poker and sports that did not exist six years ago.

More importantly, operators and regulators have both played significant roles in getting the industry to where it is today.

“I think the difference-maker was operators willing to invest in the new area and regulators who were willing to roll up their sleeves and take on the challenges of monitoring a new gambling form,” said David Schwartz, a gambling expert at the University of Nevada, Las Vegas.

In a nutshell, innovation has been key to keeping New Jersey’s online gambling industry as a force to be reckoned with.

Companies such as 888, for instance, are not just sitting back and counting the number of new player sign-ups and deposits coming in on a daily basis. Sure, acquiring new players is essential in a highly competitive market, but so is having a great product.

Sherman said it’s important not to get too comfortable with products because “there is always something you can do.”

In July, 888 Casino rolled out its new Orbit gambling platform to give customers a better user experience. This includes offering a unified best-of-class experience to the players.

“They need to be able to move between the products seamlessly and have an entertaining experience. That’s exactly our goal,” said Sherman.

“The better American products are yet to be seen, and as a tech developer this is what we are aiming for. [We want to] offer the best possible product in the marketplace.”

The addition of new games (and more of them) plus a constantly evolving and improving the network of platforms keeps everyone on their toes to some extent. From slots to poker tables to online sportsbooks, each addition has done something to give the market another push.

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Pennsylvania and future competition

Of course, there is now fresh competition coming from Pennsylvania. The PA online casino industry that has been years in the making finally got up and running this summer.

Operators such as UnibetSugarHouse and Parx can market their products in both NJ and PA. And the big sports betting dogs, FanDuel and DraftKings, also now feed into both states (if not more).

But should NJ land-based casino operators start fearing that the Keystone State will take a piece of their online revenue pie? It is sort of like when casinos opening around the Philadelphia area did to the Atlantic City market a few years back.

Well, for one, and in this particular case, it doesn’t involve getting on the Atlantic City Expressway. Secondly, the NJ industry is well-established. Pennsylvania is just getting its feet wet.

Long term, however, it’s too soon to judge how this storyline will play out. Changes in the Wire Act, coupled with new partnerships and deals, it could help or hinder the growth in either state. It all depends.

To Schwartz, it’s all a matter of borders.

“I think it may impact New Jersey a bit, as PA players stay home to place online wagers, but it isn’t a given,” said Schwartz. “If the customer experience isn’t as good in PA as it is in NJ, PA players could continue to cross the border to place bets.”

Why look into the NJ online casino crystal ball?

Granted, in the grand scheme of things, the NJ online gambling business is still in its infancy, especially when compared to Europe’s gambling industry.

And that’s why wanting to foretell the future of this crazy online gambling experience is perhaps not the right path to take.

Case in point, Resorts, Caesars and Bally’s have been mainstays on the AC Boardwalk for at least 40 years. They’ve been through more ups and downs and survived.

Casino and sports betting apps, for now, remain a major component of the future growth and success of these properties.

Schwartz foresees the online casino industry will continue to grow slowly and be “nothing spectacular.”

“As people get more used to playing online, it will level off,” said Schwartz.

Sure, it will level off; it may even hit a rocky spot or two. For now, the market is at record levels and that’s something worth celebrating.

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Bill Gelman

Bill Gelman is a veteran sports writer based just outside of Philadelphia and not too far from the Jersey Shore. Bill spends time in Atlantic City writing about casino openings and expansions, special events and now NJ sports betting and online gambling.

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