April marked the first full month of coronavirus pandemic-fueled casino shutdowns in Atlantic City and it showed. The revenue figures released May 13 by the New Jersey Division of Gaming Enforcement painted the bleakest picture in terms of year to year comparisons.
Revenue at the nine casinos tumbled almost 69 percent for the month.
All told, the casinos took in $82.6 million in revenue, almost all of it online. In April 2019, $265.4 million came in. Online gambling gained almost 119 percent.
“Internet gaming is a welcomed alternative source of revenue for the casinos. The results prove that the gambling public is looking for a substitute while the casinos are closed. However, just like take-out for fine dining restaurants, I think everyone is looking forward to getting back to the full experience,” said Jane Bokunewicz, coordinator of the Lloyd D. Levenson Institute for Gaming, Hospitality and Tourism at Stockton University.
The industry brought in $2.6 million in sports betting revenue base on $54.5 million in bets, according to the Associated Press. Not bad considering how few events gamblers could wager on. But the previous April saw some $314 million in bets when sports other than Belarussian soccer, ping pong and table tennis were available.
April’s revenue decrease broke the previous negative record set in March, when casinos shuttered for the second half of the month and revenue fell 44 percent.
Ocean Casino Resort won $1.2 million, most of it online. Hard Rock took in $4.5 million. Tropicana won almost $6 million. Borgata won $16 million. The Golden Nugget topped the casinos with $27.6 million, the most successful internet casino in the city.
Resorts Digital—the internet gaming arm of Resorts—saw online gaming revenue increase by nearly 41 percent to $16.7 million. Likewise, Caesars Interactive, which represents online casino gaming for Harrah’s, Caesars and Bally’s, took in $87 million, up more than 90 percent.
“Caesars actually went through the process to get a casino license for Caesars Interactive. Resorts did the same and created Resorts Digital –which also has a casino license,” said DGE spokesman, Leland Moore.
No other casino did likewise.
“Overall, online helped several properties pay some bills. Out of it may come some converts to the virtual gaming experience. Others probably can’t wait to return to the brick and mortar experience,” said Bob Ambrose, a former Atlantic City gaming executive and casino consultant, and adjunct professor, casino and hospitality.
The director of the DGE praised online gaming during the May 15 session at Clarion Gaming’s ICE North America digital conference. New Jersey is one of four states that have some form of online gaming, the others being Pennsylvania, Delaware and Nevada.
“If you continue to build out the monthly numbers at the rate they are today, you’re looking at an industry that’s going to surpass $1 billion in gross gaming revenue just in the state of New Jersey,” David Rebuck said. “Whether that continues or not when we have the retail side of the business back, I think that remains an unknown and that’s a real challenge for our operators, because the growth in gaming is not just coming from people who are gambling more.”
Rebuck said gaming jurisdictions seem more inclined to wager on sports betting than online casinos, even though the latter has been in place more than five years in New Jersey, compared to less than two for sports betting.
Perhaps it’s the uncertainty brought about by the federal Department of Justice take on the 1961 Wire Act that could stop online casino gaming. New Jersey is among the states fighting in the U.S. Court of Appeals to end the DOJ quest.
“The messaging coming out from some of the naysayers and those opposed to online gambling, in some cases, is extremely hypocritical,” Rebuck said. “They offer online sports wagering in their jurisdictions and might even offer online sports wagering from their properties, but for some reason, they have moral issues with online casino gaming.”
Rebuck said online casino gambling is a viable business opportunity across the country. Online casino gaming has not cannibalized brick-and-mortar operations in Atlantic City, according to CDC Gaming Reports.
“We see an expansion of gambling. We have people interested in online gambling and not interested in the retail environment and people who want to do both. Cannibalization is a false positive by those who fear change,” Rebuck said.
New Jersey, which has online operators partnering with brick-and-mortar casinos, is an example for states to follow, he said. Casinos are able to verify a player’s identification, age, source of funds and how that money is wagered.
“I think the New Jersey model is stronger,” Rebuck said. “I will put our system against any in-person verification of people.”
