New Jersey’s Internet Gambling Revenue Hits New High as In-Person Casino Winnings Lag Behind

In August, New Jersey’s internet gambling market set a new record, generating over $198 million in revenue. This figure, reported by the New Jersey Division of Gaming Enforcement, marks the highest monthly total ever for the state. Internet gambling continues to grow in popularity, with the revenue rising by nearly 28% compared to the same period last year. However, despite this surge in online gaming, most Atlantic City casinos still see lower in-person earnings than they did before the pandemic.

Strong Month for Internet Gambling

New Jersey’s online gambling sector had its most successful month ever, bringing in $198.4 million. This was a significant leap from August 2023, when the figure stood at $155.3 million. The impressive growth of 27.8% highlights the increasing importance of internet gaming for the state’s gambling industry.

While this boost in online gambling is encouraging, it contrasts sharply with the ongoing struggles of Atlantic City’s physical casinos. Six of the nine casinos in the city reported less revenue from in-person gamblers than they did in August 2019, before the COVID-19 pandemic shook the industry. This suggests that despite recovery efforts, the land-based casino sector is still feeling the effects of the pandemic, and physical gambling may take longer to bounce back.

Atlantic City’s casinos collectively won $294 million from in-person gambling in August 2024, marking a 4.9% increase from a year earlier. However, these numbers reveal that the core business of most casinos, which relies heavily on revenue from physical premises, continues to underperform compared to pre-pandemic levels.

Of the nine casinos, only Borgata, HardRock, and Ocean managed to exceed their in-person winnings from August 2019. Borgata led the way with $74.2 million, representing a modest 1.6% rise. Hard Rock followed with $55.3 million, an increase of 9.2%, while Ocean saw the highest jump, with an 11.4% increase to $44 million.

Despite these increases, six casinos – Resorts, Caesars, Harrah’s, Bally’s, Tropicana, and Golden Nugget – reported lower in-person revenues than in 2019. This suggests that the pandemic’s lingering impact continues to weigh on foot traffic to Atlantic City’s gaming floors, where overall activity remains sluggish.

The broader picture of New Jersey’s gambling industry becomes clearer when internet and sports betting revenue is included. In August 2024, casinos, along with two horse tracks that accept sports bets, recorded a total gaming revenue of over $555 million. This represents a 4.4% year-over-year increase, driven mainly by the growth in online gambling.

However, casinos still view their in-person winnings as the heart of their business. They share internet and sports betting revenue with outside entities like sportsbooks and online platforms, which cuts into their profits. As a result, even though the overall numbers paint a positive picture, many casinos are still focused on reviving their physical gaming operations.

Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, acknowledged the growing influence of internet gambling. She remarked, “This important vertical for the casino industry has topped $190 million in four of the last eight months in a trend that is seeing off-property gaming activity, which includes online sports betting, contribute nearly half of Atlantic City operators’ total gross gaming revenue.”

Sports Betting Faces Statistical Anomaly

In contrast to the booming internet gambling sector, sports betting revenue in New Jersey saw a notable decline. The state’s sportsbooks brought in $62.7 million in August 2024, a drop of nearly 35% from the $96 million recorded a year earlier. Bokunewicz attributed this sharp decrease to an exceptional high in August 2023, making this year’s numbers seem lower by comparison.

Still, nearly $699 million in sports bets were placed in New Jersey during the month. However, the market has contracted slightly due to Freehold Raceway’s decision to stop taking sports bets as of July 31. This leaves the Meadowlands Racetrack and Monmouth Park as the only horse tracks in the state where sports betting is still available.

While the overall numbers for August 2024 look positive, the performance of individual casinos varied significantly. Borgata was the top performer in of total revenue, winning $125.5 million, which included both in-person and online earnings. This was a 6.4% increase from the previous year.

Hard Rock followed closely with $72 million, marking a significant rise of 21.5%, and Golden Nugget posted the largest percentage increase at 29%, winning $69.7 million. Other casinos, such as Ocean, Tropicana, and Bally’s, also saw substantial gains, with their total revenues increasing by 10.1%, 41%, and 24.3%, respectively.

In contrast, Resorts reported a decrease in revenue. Its total winnings, including in-person, internet, and sports betting revenue, dropped by 8.3% compared to the previous year, while its online arm, Resorts Digital, saw a 30.2% decline in earnings.

As New Jersey’s internet gambling market continues to grow, the state’s casinos face a mixed outlook. Online gaming revenue is hitting new heights, but in-person gambling at Atlantic City’s casinos remains sluggish compared to pre-pandemic levels. While some properties are showing signs of recovery, others are still struggling to match their former performance, highlighting the ongoing challenges in balancing both physical and online operations in the evolving gambling landscape.

Source:

New Jersey Division of Gaming Enforcement. (2024, August). Press release: August 2024 financial results. [pdf]