Back to the future for land-based casino revenue
Atlantic City, New Jersey was once an international gambling destination only rivalled in the USA by Las Vegas. However, a slew of the city's casinos have folded in recent years. This is partially due to the worldwide downturn in offline casino profit caused by the emergence of online variants. As a result, New Jersey's once strong land-based casino industry has rapidly declined. This decline is highlighted in the figures revealed recently in the New Jersey Casino Commission’s February report.
The year of 2015 was always going to be a tough year for Atlantic City's land-based casino economy, with 2014 seeing the closure of several of the city's major casinos. Within months of each other, the iconic Atlantic Club and historic Showboat casinos closed their doors. This was followed by the $2.4 billion Revel being shutdown after only 10 months in business. Even tycoon Donald Trump could not escape the downturn. Indeed, the Trump Plaza was falling in business at the end of last year and the Trump Taj Mahal is likely to follow soon unless creditors can be appeased. However, even when discounting Atlanta's closed casinos from the equation, the report revealed that the city's eight remaining casinos still posted 7.2% less profit than a year ago. That is a drop to $375.9 million.
In contrast, the revenue of the online sector of New Jersey's gambling industry has grown. Increased online casino games use in the state has contributed to a revenue rise of almost 1% to $10.4 million. This growth continues an upwards trend for online gambling in New Jersey, which saw a huge increase of 63.6% and 22.3% in December 2014 and January 2015, respectively. These increases have also seen online casinos account for a larger percentage of igaming revenues in the state, with 81.4% of the total revenue now being generated by these virtual gambling establishments. This is an increase of 16.13% over the 2014 figures, which is a leap from $7.19 million to $8.35 million.
Ironically, despite being a casino classic and massively popular online real-money activity in other states, online poker continues to be the lowest performing game of this ascending sector. Not only did online poker only contribute $2.05 million to the pot in February, it also saw a drop of 35.2% on the $3.1 million revenue for the same month in 2014.
Despite the spiking revenues of online casinos, the combined revenue for both New Jersey’s land-based and online casinos has seen a drop of 14.8% since this time last year. The total generated revenue in February was revealed to be $174.4 million compared to the $209.4 million in the same month of 2014. This steep drop is down to the sharp fall in land-based casino revenue not being completely medicated by the slight rise in online casino revenue.
However, chairman of the commission Matt Levinson remains optimistic. He has cited severe weather conditions as responsible for the lacklustre land-based casino performances whilst complimenting the strong performance of internet gaming operations, especially considering the collateral damage caused by a $1.5 million online jackpot pay-out. He also revealed that the state of New Jersey received $14 million from gambling taxation for the month of February.
