The Facts About Year One Of NJ Online Gambling Revenue

Online Gambling A Critical Revenue Backstop For Atlantic City During Year Of Crisis

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We’ve all heard the story: New Jersey’s online gambling revenue is well below official expectations.

These revenue reports have opened the industry up to attacks from the opponents of iGaming expansion and are partially to blame for further iGaming expansion stalling[i].

But has the industry been given a fair shake? And just how bad have the revenue numbers really been?

Despite the “disappointing” revenue numbers, online gambling wasn’t a failure in New Jersey. Far from it.

From a regulatory perspective it was an unparalleled success, and even those seemingly-paltry revenue numbers still represent a significant amount of the total gross gaming revenue (GGR) generated in New Jersey.

Fact: iGaming Revenue represents 4.5% of total GGR

During its first full year, New Jersey’s online gaming industry generated $123 million in GGR. You can view a breakdown of revenue by operator and product here.

By comparison, the total GGR of the entire NJ casino industry in the state (brick & mortar and online) was $2.7bn in 2014.

That means online gaming was responsible for a not-so-insignificant 4.5% of the New Jersey gaming industry’s total GGR in 2014.

Fact: iGaming softened the blow of casino closures

With the industry trending downward, coupled with four casinos closing their doors in 2014, New Jersey gaming revenue was expected to take a historic hit in 2014.

But, with online gaming, New Jersey’s total gaming revenue dipped only 4.47%, from 2013 ($2.87bn) to 2014 ($2.74bn).

The 4.47% drop-off is Atlantic City’s smallest yearly decline since 2006 according to UNLV’s gaming research:

  • 2006: +3.97%
  • 2007: -5.69%
  • 2008: -7.64%
  • 2009: -13.24%
  • 2010: -9.59%
  • 2011: -6.94%
  • 2012: -8.03%
  • 2013: -5.93%
  • 2014: -4.47%

Without online gaming the decline would have been over 9%, making it the third worst year on record, and the worst year, in terms of percentage decline, since 2010.

Keep in mind, this happened in a year when four casinos shut down (Atlantic Club in January, and Showboat, Revel, and Trump Plaza in September) and a fifth, Trump Taj Mahal, filed for bankruptcy.

Bottom line: iGaming kept 2014 from being a disastrous year (revenue wise) for gaming in Atlantic City. And this was accomplished without the leading online poker brand in the world, PokerStars.

Fact: Casinos with successful iGaming thrived

As much as it buoyed the industry at large, online gaming was even more important for the revenue pictures of individual operators.

For some operators online gaming revenue represented a much bigger slice of their revenue pie than the 4.5% of revenue industry-wide, and in one case it was the difference between Year-Over-Year growth and decline.

Percentage of Total Casino GGR from iGaming

Casino2014 Total GGR2014 Online GGR% of 2104 GGR
Golden Nugget$171.9mm$10.8mm6.3%

YOY revenue with and without iGaming

Casino2013 GGR2014 GGR
(including iGaming)
2014 GGR
(excluding iGaming)
Golden Nugget$124.2mm$171.9mm$161.1mm

Online swings NJ many casinos from drop to growth

Without iGaming the Borgata would have posted a YOY revenue dip of nearly $18 million, but with iGaming Borgata (who operates in cooperation with partner PartyPoker NJ) posted a $26.5 million YOY increase.

As beneficial as online gaming was to Borgata, it was a boon for both Tropicana and Golden Nugget.

Tropicana posted a staggering 17% YOY revenue increase, and Golden Nugget did even better, increasing revenue nearly 28% from 2013 to 2014.

Without online gaming Tropicana’s YOY increase would have been 10% and Golden Nugget’s 23%.

Of the four remaining online operators in New Jersey[ii] only the combination of three Caesars Entertainment properties, Bally’s, Harrah’s, and Caesars posted a YOY loss, and the revenue decline was negligible at less than 2%.

Bottom line: iGaming was the reason Borgata posted a YOY increase, and bolstered both Golden Nugget’s and Tropicana’s year-end revenue results.


[i] Sheldon Adelson lobbyist Fabien Nunez called New Jersey’s lack of revenue “one of his most effective arguments with California legislators,” during California Conference on Online Gaming last year.

[ii] iGaming wasn’t enough to prevent the Trump Plaza casino from closing and its iGaming partner Betfair was forced to migrate to Golden Nugget. Ultimate Gaming dissolved their partnership with Trump Taj Mahal following the casino’s Chapter 11 bankruptcy filing.

- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.
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