New Jersey iGaming Improves 5.4% In July

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Thursday, August 14th, 2014 | Written by Stephen Smith

After three months of consecutive declines, New Jersey’s iGaming industry reported a return to growth last month, with the state’s online operators generating revenues of $10.07 million in July, up by 5.6% compared to the $9.51 million taken in June. In spite of its online results, however, Atlantic City casinos reported a fall in revenues overall, with the $274 million collected in July lower by 11% compared to $297.1 million taken in July 2013.

Online casinos up almost 6% in July

From the $10.07 million in iGaming revenues generated in July, online casino games accounted for $7.923 million of the tally, a 5.9% improvement over the previous month.

Continuing to lead the way in New Jersey’s online casino market was Borgata (bwin.party) with $2.07m in revenues, down 13.4% from June; followed by Caesars Interactive (888/WSOP) up 2.8% to 1.7m; and Tropicana (Virgin/Gamesys) up 12% to $1.96m. Next, was the Golden Nugget up 24.8% to $944,840 in July; followed by the Trump Plaza (Betfair) up 25.6% to $676,607; and in last spot was the Trump Taj Mahal (Ultimate Gaming) up 20.4% to $587,043.

Online poker improves by 4.6%

The Garden State’s three operators currently offering online poker saw revenues rise by 4.6% to $2.146 million in July, compared to the $2.05 million reported for the previous month.

The battle for NJ’s top poker spot was a lot closer in July, however, with Borgata (bwin.party) generating $1.109 million last month, up by 3.1% compared to June; with Caesars Interactive (888/WSOP) only just behind with $1.010 in revenues, up 7.2%. A long way behind in third place was Trump Taj Mahal (Ultimate Gaming) with just $26,043 in revenues, 14.4% lower than the previous month.

New account signups up 7.1%

Another positive taken from NJ’s recent iGaming results was the fact 26,826 new account were opened in July, up 7.1% from June, and bringing the total number of accounts created since November of 2013 to 405,390. During that period of time, New Jersey online gambling has generated $73.12 million in revenues, $18.82 million of which was derived from poker.

Atlantic City casinos down 11%

While NJ iGaming saw an improvement in its numbers, the state’s brick-and-mortar casinos continued their slide and reported a 11% fall in revenues last month to $274 million.

While the Golden Nugget (+40.5%) and the Tropicana (+34.2%) noted an an impressive improvement in revenues compared to July 2013, Revel posted the biggest monthly decline, down -36% to $14.8 million; followed by Trump Plaza down -34% to $5.4 million; then the Showboat down -19% to $15 million. All three of the casinos just mentioned have announced they will close their venues in the coming months. In a recent message to investors, Fitch Ratings described the closure of the $2.4 billion Revel casino complex as illustrating “the depth of distress for the Atlantic City gaming market.”

Seven years of decline for NJ

So far this year, Atlantic City has generated $1.55 billion in gambling revenues, assisted by a boost from online gambling, and putting it on track to reverse seven years of decline by the beleaguered east coast gambling resort. Unfortunately, the closure of the Atlantic Club in January followed by three more casinos in the coming month will prevent that from happening now.

In addition, the four closures are set to add around 7,000 people to the city’s unemployment figures, whilst also stripping 17% from AC’s taxable property values, or $1.9 billion, according to Moody’s Investors Service. In fact, the situation has become so worrying of late that on Wednesday New Jersey Governor Chris Christie called a bipartisan summit for September in order to find ways in which to rescue the state’s casino industry.

However, Christie has also highlighted the need for Atlantic City to diversify its heavily dependent economy away from just casinos, and in a statement released on Wednesday, said:

“Important signs are evident of the progress taking hold in the non-gaming development and economic activity we are seeing in (Atlantic City), including businesses opening, attractions being added, and key non-gaming revenue streams rising.”

New Jersey’s first casino opened in 1978 and for years the state enjoyed a virtual monopoly on casino gambling until neighbouring states, such as Delaware, Connecticut, Pennsylvania, New York and Maryland, opened casinos of their own to bolster state budgets. In 2007, Atlantic City subsequently suffered its first fall in gambling revenues, heralding a seismic shift in AC’s history. As Caesars Chief Executive Officer Gary Loveman, explains:

“As Pennsylvania gaming in particular became available to the incumbent customer group, the drive-in business in Atlantic City has all but disappeared. That was both a large and very lucrative part of what was on offer in Atlantic City and I think most of us who worked there agree that business will never return.”