Legal gambling in New Jersey just had one of its best years ever.
With record-breaking returns from NJ online casinos and sports betting in New Jersey, this past year will go down as one of the best for Atlantic City casinos in nearly two decades, even if the economic prosperity is not shared among all nine gambling parlors.
So, what will 2024 bring for legalized gambling in NJ?
Some storylines are obvious, such as the potential smoking ban inside Atlantic City casinos. Others, such as NJ online casinos’ seemingly never-ending upward trajectory and when (not if) monthly revenue from iGaming will surpass land-based casinos, are only interesting to gambling industry insiders.
Nonetheless, here are three gambling and casino stories PlayNJ is watching for in the new year.
War over smoking inside Atlantic City casinos carries over into 2024
As noted above, one of the biggest things to pay attention to in 2024 is what happens with the ongoing effort to snuff out smoking inside Atlantic City casinos.
The controversial topic seemed to be coming to a conclusion at the end of 2023. A bill to permanently ban smoking on casino floors in Atlantic City had more than enough support to pass both the state Senate and Assembly. The lame-duck session was an opportune moment to get it done.
But, in the 11th hour, the AC casino industry flexed its political muscle and turned the tables on anti-smoking advocates. The Senate bill failed to make it out of committee hearings, let alone be brought up for a full vote by the State Legislature.
The failure in 2023 was a gut punch to some AC casino workers and their allies who believed a smoking ban was finally going to happen after more than a decade of fighting for it.
A new legislature will be sworn in later this month and there are no guarantees a casino smoking ban will have the same level of support. The casinos are fighting tooth and nail to prevent a smoking ban. Groups such as CEASE (Casino Workers Against Smoking’s Effects) and the UAW are pushing hard to get a ban passed.
The battle rages on in 2024.
NY casinos are biggest threat in AC’s history
Economics is at the heart of why Atlantic City casinos are fighting hard against a smoking ban. Whether or not a smoking ban will hurt the casinos’ bottom line is debatable.
But one tangible threat is not up for debate: New York City casinos.
Three downstate NY casinos are coming. This much is certain.
Where those downstate casinos will be located and when they will be fully operational are decidedly less clear, thanks to a painfully deliberate process in the Empire State.
Still, the fact remains that Atlantic City casinos are staring directly at the most significant threat ever to their viability and sustainability.
Pennsylvania casinos played a huge part in cutting AC casino revenue in half over the last 20 years. Two-thirds of the Atlantic City casino market is treading water today.
New York casinos — particularly in New York City — will make PA casinos look like child’s play.
Think about it.
A full-blown casino resort in the heart of Times Square or on Coney Island would be insurmountable competition for Atlantic City casinos looking to attract North Jersey and New York state gamblers. A gambling and entertainment complex near Citi Field, the Billie Jean King National Tennis Center and LaGuardia Airport in Queens would kneecap several underperforming Atlantic City casinos.
According to one of the country’s most prominent casino executives, NY casinos could take away nearly 30% of the market’s customer base over the next several years.
If that happens (and PlayNJ believes that executive was downplaying the situation), it won’t be a question of “if” any Atlantic City casinos fold, but “how many.”
NJ online casinos will pass Atlantic City casinos in 2024
The silver lining for Atlantic City casinos over the last few years has been the continued success of online casinos in NJ.
Well, sort of.
There is no question that NJ online casinos proved to be an economic lifeline for Atlantic City when the COVID-19 pandemic upended the industry in 2020. People were stuck in their homes for months on end, so the convenience and accessibility of internet gambling were appealing.
Atlantic City casinos do not keep anywhere near 100% of online revenue. But whatever they do collect is undeniably beneficial, especially for the smaller casino operators in AC.
In 2023, online casinos in NJ set new records for monthly revenue three different times (and December’s results haven’t been published yet), according to public data.
Casinos still trying to reach pre-COVID popularity
However, there is also no question that the growth of online gambling has come at the expense of Atlantic City casinos. Nearly every quantifiable metric of visitation and volume associated with Atlantic City casinos is down compared to pre-pandemic levels.
Traffic on the AC Expressway. Passengers at the airport. Overnight hotel stays. Average spend by customers. The number of employees in AC casinos. (We could go on, but you get the point.)
All down.
This means (besides the fact that it’s time to revisit the cannibalization debate) that it is only a matter of time before the monthly revenue reported by online casinos matches or exceeds the monthly revenue reported by land-based casinos in Atlantic City.
It will most likely happen in the winter or fall since summer is (obviously) the busiest time of the year at the Jersey Shore. Once it occurs for the first time, our best guess is that it will continue to happen. And, eventually, online casinos in NJ will overshadow Atlantic City as the primary gambling revenue generator in the Garden State.
Here’s the kicker for AC. Since New Jersey collects almost twice as much taxes from online casinos than Atlantic City casinos, don’t expect Trenton politicians to do anything that reverses this trend.
