New Jersey Gambling Revenue Spikes 14% YoY, While Casinos Struggle to Reach Pre-Pandemic Levels
Jul. 20 2023, Published 3:48 p.m. ET
New Jersey's gambling landscape has undergone dramatic change in recent years, driven by the proliferation of online and sports betting platforms. These digital platforms proved instrumental during pandemic conditions when brick-and-mortar establishments experienced restrictions or temporary closures, offering alternative avenues of betting for consumers.
Legalized sports betting in New Jersey in 2018 was a watershed moment for the industry. Casinos and racetracks could now offer in-person and online sports betting, opening up new avenues of revenue generation. Mobile sports betting apps provided players with easy ways to place bets from their smartphones further increasing participation and revenue generation.
In June, internet gambling revenues reached nearly $150 million - an impressive 12.1% year-on-year growth compared to 2013. Attracting more players, New Jersey's top online casinos (as per NJ.bet) and betting platforms drove this significant revenue boost for the industry. These sites have become an established feature in Atlantic City gambling markets while providing convenient alternatives to local venues for gamblers.
Sports betting emerged as another key source of revenue growth, accounting for over $591 million worth of sports bets in New Jersey during one month alone. Casinos, tracks and their partners managed to rake in a whopping $66.3 million profit after covering winning bets and expenses associated with sports betting platforms — an encouraging sign of its rising popularity! Combining the thrills of sporting events with ease of placing bets online makes sports betting an extremely profitable segment of gambling industry.
Atlantic City Facing Recovery Challenges
While overall revenue numbers for New Jersey gambling industry paint a positive picture, it is important to recognize that not all casinos have experienced equal levels of success. Atlantic City's recovery from pandemic-induced economic downturn has been uneven with two of its newer establishments such as Hard Rock and Ocean Casino being particularly hard hit compared to others.
Hard Rock and Ocean have quickly established market shares since opening their doors five years ago, outperforming their counterparts and showing resilience and appeal among gamblers. Their in-person gambling revenue in June 2023 exceeded pre-pandemic levels proving their resilience while the remaining seven casinos continue to make efforts to recover lost ground from pandemic.
From 2015 to 2019, seven remaining casinos earned combined earnings of more than $1 billion from in-person gamblers during each first half year from 2015-2023; however, during 2023 their revenue dropped significantly and in 2022 it stood at just $911.5 million; as a result, recovery has been slower among these establishments and it may take additional time for them to regain pre-pandemic revenue levels.
The Casino Association of New Jersey, the trade group for the Atlantic City casinos, said the numbers show “that the industry continues to be in a rebuilding and recovery phase from where it was three years ago.”
More than $591 million worth of sports bets were made in New Jersey in June, with casinos, tracks and their partners keeping $66.3 million as earnings after paying off winning bets and other expenses.
Casino Executives Address the Challenges Amid Revenue Growth
Casino executives remain cautious when discussing revenue growth figures, placing great importance on accurate interpretation. One factor contributing to revenue increase may be an upswing in online and sports betting earnings; however, it must be remembered that much of these revenues may be shared out among partners such as sportsbooks and tech platforms - in some cases up to 70% is allocated this way, decreasing how much ultimately remains within casinos themselves.
Casino executives stress the significance of considering each revenue source when assessing financial performance of individual establishments. While online and sports betting have undoubtedly broadened revenue streams and expanded the industry, they can present unique challenges regarding distribution.
The Casino Association of New Jersey, representing Atlantic City casinos, recognizes that while their industry is recovering overall from what was an extremely poor state three years ago. Yet they remain optimistic about its growth potential in light of an ever-evolving gambling landscape.
Conclusion
New Jersey's gambling industry has shown resilience and adaptability in the face of pandemic challenges, as demonstrated by revenue growth of nearly 14% between June 2023 and 2024, reflecting online gambling and sports betting as integral components of Atlantic City gambling market. Recovery process has been uneven across casinos with certain casinos outperforming others during recovery process.
Hard Rock and Ocean have taken the lead, surpassing pre-pandemic revenue levels while remaining establishments are working toward meeting previous financial milestones. Casino executives cautioned about misinterpreting figures, emphasizing the significance of understanding revenue sources while sharing a portion of online sports betting earnings with partners.
As the gambling industry in New Jersey evolves, it faces both opportunities and challenges. Online and sports betting have revolutionized the industry by offering convenient options to players while creating additional revenue streams for operators. Casino executives must carefully navigate revenue-sharing arrangements as they balance operations to ensure sustainable growth in this dynamic marketplace.