Reversal Of Fortunes: NJ Online Casino Revenue Down, Online Poker Up In August

Posted By Steve Ruddock on September 16, 2016

[toc]After taking giant leaps forward thanks to record-setting revenue numbers in July, the New Jersey online gambling industry took a step backward in August, as online gaming revenue dropped to its lowest point since February of this year.

That being said, August 2016 was still the fifth best month in the industry’s history, which now spans 33 months.

In a departure from the norm, the losses came solely on the online casino side in August, as online poker revenue rose more than eight percent, while online casino revenue was down 9.5 percent.

  • August 2016 online casino revenue: $13.9 million
  • August 2016 online poker revenue: $2.2 million
  • August 2016 total online gambling revenue: $16.1 million

What happened with the NJ online casinos?

It was a very strange month for New Jersey’s online casino industry. Making sense of it requires a deep dive into the August 2016 numbers as well as the historical numbers.

As has been the case all year, online casino revenue was up considerably year-over-year, by some 30 percent, but down sharply month-over-month, 9.5 percent.

Normally this type of decline is the work of a substantial online slot jackpot being hit, but in August, online casino numbers were down across the board:

It appears something was responsible for the August decline, something I’m calling “The July Bounce.”

[show-table name=cta-tropicana]

Making sense of the unusual July bounce

Of note, online casino revenue slid from July to August in 2015 and 2016 (there was a slight uptick in 2014), but the decline was nowhere near as sharp in 2015, as iCasino revenue went from $10.6 million in July 2015 to $10.2 million in August. That’s a mere four percent decrease.

In 2016, the drop was, as noted above, a near 10 percent decline, with online casino revenue going from $15.4 million to $13.9 million.

Three years in, a summer trend is emerging.

Historically, after peaking in March, the industry has experienced a spring decline that begins in April and lasts through June. Month-over-month revenue has dropped in eight of these nine months, with the only outlier being April 2016.

This decline has been followed by a July bounce in all three years, before revenues once again dip in August and September (with the exception of August 2014).

Based on this, I suspect we’ll see another month-over-month decline in September. However, because of the precipitous drop this August, next month’s numbers may be stagnant, or even slightly positive.

YoY growth continues for legal NJ online gambling

The month-over-month decline will likely steal the headlines, but August was yet another solid month of year-over-year growth, as the industry grew by over 30 percent.

Here is a look at the market’s percentage of YoY changes in 2016:

  • January +26 percent
  • February +42 percent
  • March +18 percent
  • April +34 percent
  • May +33 percent
  • June +40 percent
  • July +39 percent
  • August +32 percent

And this growth in 2016 is merely a continuation of the trend we saw develop in 2015:

  • January +18 percent
  • February +9 percent
  • March +10 percent
  • April +10 percent
  • May +19 percent
  • June +23 percent
  • July +24 percent
  • August +16 percent
  • September +15 percent
  • October +22 percent
  • November +51 percent
  • December +31 percent

nj-rev-aug2016

How did the individual operators do?

  1. Borgata: $3,737,494
    1. Borgata iPoker: $608,812
    2. Borgata iCasino: $3,128,612
  2. Caesars: $3,117,389
    1. Caesars iPoker: $699,526
    2. Caesars iCasino: $2,417,863
  3. Tropicana: $2,853,930
  4. Golden Nugget: $3,469,206
  5. Resorts: $2,896,284
    1. Resorts iPoker: $865,150
    2. Resorts iCasino: $2,031,134

Borgata’s hold on top spot increasingly tenuous

Before PokerStars entered the picture, Borgata could rely on its roughly $1,000,000 a month in online poker revenue to pad its online casino revenue. This cushion was enough to keep all other operators from challenging it, and Borgata has been the leader in total online gaming revenue each and every month since the industry launched.

But with PokerStars’ entry, Borgata’s cushion is now about $600,000, and Golden Nugget is starting to breathe down Borgata’s neck.

Golden Nugget cements its place as top NJ online casino

Golden Nugget received a lot of buzz when it set an online casino record in July with more than $3.7 million in online casino revenue. August saw Golden Nugget’s iCasino revenue slip back down to the industry’s previous high water mark of around $3.5 million.

Despite the decline, this is still tops in the industry, and more growth is likely on the horizon.

Golden Nugget is the only New Jersey online casino with live dealer games, and PlaySugarHouse.com recently launched under the Golden Nugget’s operator license, giving GN three distinct brands (Golden Nugget, Betfair, and SugarHouse), including a top Philadelphia-area casino.

Tropicana dips below $3 million

Tropicana dipped below the $3 million mark for the first time since January 2016, and is on the verge of being overtaken by Resorts, which would leave Tropicana in last place among the five online operators.

Resorts suffers a setback

After a three-month slide, Resorts’ online poker revenue (powered by PokerStars) rebounded in August.

  • March: $597,677
  • April: $1,177,837
  • May: $1,151,703
  • June: 778,078
  • July: $754,199
  • August: $865,150

This is a good sign for PokerStars in the market, as it seemed to be falling back into the pack in July, but once again opened up a large lead in August.

Resorts’ online casino revenue has been a bit more tumultuous, but the casino’s online poker products continue to hover round the $3 million mark.

Here’s a rundown of Resorts’ online gaming performance since launch:

  • February 2015: $50,909
  • March 2015: $154,071
  • April 2015: $212,739
  • May 2015: $324,662
  • June 2015: $400,600
  • July 2015: $558,316
  • August 2015: $735,140
  • September 2015: $944,299
  • October 2015: $899,184
  • November 2015: $1,215,832
  • December 2015: $1,288,079
  • January 2016: $1,434,295
  • February 2016: $1,318,338
  • March 2016: $1,878,097
  • April 2016: $3,478,108
  • May 2016: $2,995,558
  • June 2016: $2,703,042
  • July 2016: $3,052,298
  • August 2016: $2,896,284

Caesars holds steady

All told, Caesars had a pretty good August. It has quietly slid into the third spot in the market, and has turned things around after a prolonged slump in 2015.

iCasino revenue was down considerably, but Caesars did post a nearly eight percent increase in online poker revenue MoM, a solid sign for both Caesars and the online poker industry in New Jersey as a whole, considering PokerStars was up nearly 15 percent month-over-month.

Historical look at online gambling revenue in NJ

nj-rev-adjusted-aug2016

*Data includes adjustments for seven-figure jackpots paid out in that month (a $1.3 million slot jackpot in June 2014 and a $1.5 million table game jackpot in February 2015).

Be sure to check our New Jersey online gambling revenue page for a detailed breakdown of iGaming revenue in the Garden State.

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Steve Ruddock

Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus is the developing legal and legislative picture for regulated US online poker and gambling.

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