The release last week by the New Jersey Division of Gaming Enforcement of the November revenue figures contained much good news for Atlantic City casino operators.
Total gaming revenue for all of New Jersey for the month was $257.4 million, up a whopping 24.7% over November 2017. Casino win alone — the number that matters most to the AC operators — was up 12.6% to $209.2 million. Internet gaming win for the state was up 30.7% to $26.9 million.
For the year, total gaming revenue in New Jersey is up 7.9% to $2.6 billion.
To put that in perspective, it’s worth noting that Atlantic City’s high point came in 2006, just as Pennsylvania and New York opened their own casinos, at $5.2 billion. The city’s casino revenues climbed every single year from Resorts opening in 1978 until that 2006 high point, then sunk every year to a low of just $2.56 billion in 2015. That figure rose modestly in 2016 and 2017, and it’s on track to climb again in 2018.
Interesting side note: Both slot machine and table game wins were up an identical 12.6% over November 2017.
So what’s not to like?
The city-wide gain mainly has been channeled through the 2018 reopening of Trump Taj Mahal as Hard Rock and Revel as Ocean Resort.
Through 11 months, Caesars is down 13.7% compared to 11 months of 2017, while sister properties Bally’s and Harrah’s were joined by Borgata, Resorts, and Tropicana with single-digit losses in that time frame.
The lone “riser” among the longstanding properties is Golden Nugget, where a 14.2% increase in revenues was almost entirely a product of its booming online casino revenues. At $94.6 million, Golden Nugget’s online casino earnings are approximately doubling rivals Borgata, Caesars Interactive, Resorts, and Tropicana.
So while more casinos and more jobs is a boon to city coffers, the “pie” isn’t growing as much as the holdover properties would hope.
Resorts, however, is getting the last laugh via its Resorts Digital partnership with daily fantasy sports behemoth DraftKings, leading the way in sports betting revenue with $23.8 million in 2018 so far.
Sports betting’s place in the NJ landscape
Where does the addition of sports betting since June fit in all this? It accounted for $21.2 million of the $51 million total gross gaming revenue increase last month vs. November 2017.
Industry observers aren’t yet ready to put any numbers on sports betting’s impact on other sectors, but it’s obvious anecdotally that some couples and groups of friends are more inclined to spend a weekend at Atlantic City due to the fact that they can wager on football games and watch them in a crowd of like-minded folks. That means extra revenue for casinos from hotel stays, meals, drinks, shopping, and additional gambling by those patrons.
Then there is online poker. For a long stretch, this vertical was producing right around the $2 million mark every single month. Proponents no doubt were frustrated by the stagnancy.
Well, “stagnant” is the new black — and it has been replaced by decline. Online poker revenues dipped to a meager $1.56 million in November, down 13.7% year over year. For the year, it is down 12.2%, so there is no chance of poker matching 2017’s numbers.
Tallying the taxes
What has all this gambling meant for New Jersey taxpayers? So far in 2018, the taxes generated look like this:
- $166.2 million from brick-and-mortar casinos
- $40.5 million from online/mobile casino gaming
- $5.1 million from online/mobile sports betting
- $2.9 million from brick-and-mortar sports betting
One gaming analyst told The Press of Atlantic City that “total year-round demand might not be sufficient to keep all nine casinos profitable by 2020 and beyond.”
Of course, as recently as 2014, there were 12 Atlantic City casinos. Wall Street analysts for years had warned that number was unsustainable, and they finally were proven right.
Can the city handle nine casinos, in the long run? That might be a dicey bet.
Photo by Africa Studio / Shutterstock.com
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