Almost seven years into New Jersey’s online casino industry, it seemed as if its direction only went one way: up, up, and up.
A 25% increase from 2016 produced $245.6 million in revenue in 2017. Two years later, that figure had almost doubled, to $482.7 million in 2019.
Then the state Division of Gaming Enforcement on Tuesday released the industry’s eye-opening June results.
On the one hand, halfway through 2020, the six- month revenue figure of $422.7 million seems to suggest yet another doubling-up for the casinos this year.
That is welcome news, of course.
But a new monthly record of $64.8 million reached in March — when all nine Atlantic City casinos closed their doors at mid-month — was followed by $80 million in April, $85.9 million in May, and now $84.9 million in June.
That is three months worth of robust — but fairly stagnant — data.
Atlantic City casinos have reopened
Eight of the nine casinos reopened on July 4 weekend, so this month’s revenue will reflect some modest brick-and-mortar figures. (Borgata announced Tuesday it will reopen on July 26 as “A little different than before — but still your happy place.”)
The Atlantic City casino industry learned years ago that its online component produced only modest “cannibalization” of its traditional revenue stream.
Still, the bump from February ($52 million) to results of between $80 million and $86 million over the past three months hints that some of that boost may have come from former casino visitors settling for an online product that may not have been their first choice.
If New Jersey Gov. Phil Murphy sees fit to allow Atlantic City casinos to reopen at more than 25% capacity at some point this year — while also allowing indoor dining or smoking, which are now prohibited — then the mobile product may take even more of a hit.
The online casino product has been a major boost to the industry’s bottom line, but it isn’t yet in the same league as actual visitor spending.
In 2019, the brick-and-mortar casinos took in $2.69 billion, while online casino revenue was $482.7 million and sports betting — both in-person at casinos and online — was $299.4 million.
Sports betting’s mobile revival
Speaking of sports betting, that sector’s $53.6 million produced in January nearly matched online casino’s $55.1 million.
A slow sports month of February dropped sports betting to $31.7 million, and the cancellation the next month of the NCAA’s March Madness tournament and other sports prompted a decline to $13.2 million.
April was even worse, as a lack of quality betting product produced just $2.6 million in industry revenue.
But that apparently will be rock bottom. The resumption of some sports in May led to an uptick to $9.9 million, and June’s result was $12 million.
The “hold,” or win percentage, for the casinos halfway through 2020 is 7.2% compared to 6.4% in 2019. Most of the uptick comes from multi-result “parlay” wagers, where casinos kept 13.1% last year compared to 17.6% this year.
Online poker revenue of $3.5 million last month was double that of June 2019, but that is a downward trend from $5.1 million in April and $4.5 million in May.
The correlation between rising sports betting revenue and declining online poker figures may be no coincidence. It may foretell further poker declines if major American team sports are successful in their looming efforts to launch and relaunch their seasons.
Golden Nugget continued its long stretch of dominance in online casino revenue, doubling its June 2019 revenue to reach $27.5 million. But Borgata nearly tripled its numbers, to $15.9 million.
Image provided by Shutterstock
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