During their prepared remarks, Schwartz and Hamilton cited data from the Golden Nugget in Atlantic City (GNAC). Rush Street operates a New Jersey online casino, PlaySugarHouse.com, through the Golden Nugget’s interactive license.
That data thoroughly debunks the myth that online gambling will cannibalize land-based casinos.
According to testimony prepared for the hearing, only 11 percent of Golden Nugget’s online casino customers were rated GNAC patrons before they registered for an online account.
Furthermore, only eight percent were active customers in the 12 months prior to registering for an online account.
In short, less than 10 percent of Golden Nugget’s online customers are customers of the casino. This despite the fact that Golden Nugget markets its online products to its land-based customers through:
Eighty-nine percent of the players who have registered at Golden Nugget’s online casino in New Jersey were new customers, wholly unknown to the casino. The first point of contact between these players and GNAC occurred when they registered their online accounts.
Three percent of Golden Nugget’s online registrations came from players classified as “inactive” by the casino. Online gaming allowed Golden Nugget to reconnect with these former customers.
Even more interesting is the impact online gambling has had on active GNAC patrons who registered an online account.
According to the testimony provided at the hearing, the eight percent of active GNAC players who signed up online increased their spend at the land-based casino by 15 percent afterward.
The eight percent of online registrants who were existing, active customers at Golden Nugget did not decrease their land-based casino spend; in fact, it increased by an average of 15 percent.
Cannibalization fears should be further diminished by a quick look at the last five years of financial information — Landry’s bought the Golden Nugget in May 2011 — provided by the New Jersey Division of Gaming Enforcement.
According to this data, online gambling has had a wholly beneficial impact on Golden Nugget.
|Land-based revenue||Online revenue||Total casino revenue|
|2013||$124,871,218 (-4.3%)||$179,120 (one month)||$125,050,338|
|2014||$174,759,670 (+40%)||$10,835,440 (first year)||$185,595,110 (+48.4%)|
|2015||$200,261,054 (+14.6%)||$30,968,182 (+185.8%)||$231,229,236 (+24.6%)|
|2016||$209,684,168 (+4.7%)||$42,249,830 (+36.4%)||$251,933,998 (+9%)|
Golden Nugget’s revenue decreased in 2013, online gaming launched in late November 2013, and revenue has risen every year since.
More importantly, during the online gambling years, revenue has increased on both the online and land-based fronts.
If online gambling was directly cannibalizing physical casinos, wouldn’t Golden Nugget’s land-based revenue decrease as online gambling revenue increases?
And this isn’t exclusive to Golden Nugget.
The only exception was Caesars. Two of the company’s three NJ properties posted modest year-over-year declines in land-based revenue in 2015 and 2016.
In each of the last two years, land-based revenue and online gaming revenue increased at five of the seven Atlantic City casinos involved in online gambling.
The introduction of online gambling has not cannibalized Golden Nugget’s land-based casino in Atlantic City. In fact, it can easily be argued the opposite is true.