Break out the champagne. New Jersey reached a milestone for 2022 when it brought in $5.21 billion in gambling revenue, equaling the state’s previous high reached in 2006, according to the Associated Press.
Now for some sobering thoughts.
In 2006, when New Jersey gaming entities last crossed $5.2 billion, casinos in Pennsylvania had not yet launched, so Atlantic City had the market east of Las Vegas sewed up—outside of Delaware, of course. But for some reason, Delaware didn’t seem to be much in the way of real competition.
By 2007, the slide in A.C. began as one by one casinos opened up across its borders with the Delaware River. The 12 casinos in play in 2006 fell to 7 by 2020, the result of fierce competition from Pennsylvania. By 2014, several casinos reached the end of the road. The Showboat, owned by Caesars Entertainment, was shuttered. Trump Plaza, far beyond the ownership of Donald Trump, shut down. The former Golden Nugget, then operating as the Atlantic Club and a year later, Trump Taj Mahal closed its doors.
In 2006, Meadowlands revenues were the result of horse racing alone. They could only dream of other sources.
In 2013, online gaming debuted in Atlantic City and has proven to be a bigger hit than sports betting, with revenues tied to individual casinos.
In 2018, the Supreme Court overturned the ban on sports wagering and New Jersey had yet another source of income and this source included sports betting at the three racetracks. Not only did New Jersey have retail sportsbooks, but digital ones as well, tied to Atlantic City casinos or the racetracks.
The 2020s have brought two more casinos to the fore as the former Revel became Ocean Casino Resort and the former Taj Mahal reopened as Hard Rock.
In the end, only half the revenues from 2022 came from in-person casinos, according to figures released by the New Jersey Division of Gaming Enforcement.
So what do we make of all this? The most obvious answer is money is money. Even if the casinos fork more than a third of their revenue to operators and tech gurus who run the digital casinos and the sportsbooks, even if three racetracks have a contribution to make towards that $5.21 billion, money is still money.
Despite the obvious changes in the calculations since 2006, Sarah Grady, assistant director of the Lloyd Levenson Institute at Stockton University, had an unusual take on the figures. That is, it took a lot of work by the state and the casino industry to reach 2006 levels when gaming revenue back then was just from in-person gamblers.
“To compare these returns, it is important to consider how much the market has changed in the past 16 years,” she told Fortune. “To achieve the returns we have today took a substantial expansion and diversification of the New Jersey gaming product to compete with increased competition from neighboring states.”
And make no mistake, the industry is not riding the kind of high it rode in 2006, when gaming companies tripped over each other for a spot at the table, whether the Boardwalk, marina district or even Bader Field.
“As we move into a new year, Atlantic City casinos are committed to providing the best possible experience for our customers, which includes making significant investments that will continue to solidify Atlantic City’s position as a world-class resort destination with top-notch dining, shopping and entertainment offerings,” said Mark Giannantonio, president of the Casino Association of New Jersey.
And there’s a silver lining in all this, of sorts. The casinos themselves won $2.78 billion at their brick-and-mortar palaces, beating the pre-pandemic level of $2.68 billion in 2019.
As in any overview looking at the economics, the figures tend to be jaundiced when taken as a whole. For example, only three of the nine casinos had higher in-person revenue in 2022 than 2019: Borgata, Ocean and Resorts.
Six casinos had more overall gambling revenue in 2022 than the prior year:
- Borgata won $1.3 billion up 18.2 percent;
- The Golden Nugget won $581 million, up 10.2 percent;
- Hard Rock won $576 million, up 12.7 percent;
- Ocean won $389 million, up 13.6 percent;
- Tropicana won $365 million, up 2.9 percent;
- Bally’s won $198 million, up 37.3 percent;
- Harrah’s won $258 million, down 3.4 percent;
- Caesars won $239 million, down 1 percent;
- Resorts won $168 million, down 0.3 percent.
- Resorts Digital, the casino’s online arm, won $546 million, up 21.3 percent; Caesars Interactive NJ won $113 million, up 1 percent.
Looking at in-person gambling revenue:
- Borgata won $724 million, up 19.5 percent;
- Hard Rock won $492 million, up 14.2 percent;
- Ocean won $356 million, up 16.3 percent;
- Harrah’s won $257 million, down 3.2 percent;
- Tropicana won $248 million, down 1.8 percent;
- Caesars won $235 million, down 0.7 percent;
- Resorts won $167 million, up 0.8 percent;
- Bally’s won $153 million, up 9.4 percent;
- Golden Nugget won $148 million, up 1.1 percent.
The casinos, sports books and internet gambling operations paid more than $526 million in taxes in 2022, almost half from a 15 percent tax on online gambling revenue.
New Jersey’s casinos and race tracks collected about $11 billion in sports wagers in 2022, a tad over 2021 figures. Of the $11 billion, the casinos, tracks and online partners retained $726 million after paying winners and expenses.
December made for a nice Christmas present with total revenue coming to $454 million, up 12.5 percent from December 2021. In-person casino winnings finished at $215 million in December, an increase of 1.8 percent from a year earlier.
The $11 billion included three straight months where gamblers bet more than $1 billion to finish out the year.
The $1.05 billion in handle in December yielded $87.7 million in sports betting revenue, a 48.5 percent increase from the same period last year. A good month indeed.
Of the total revenue from sportsbooks, the nine casino licensees chalked up $38.5 million, an even bigger increase—57.5 percent—compared to December 2021, according to PlayNJ.
However, it should come as no surprise the Meadowlands Racetrack, led by FanDuel Sportsbook, can once again refer to themselves as No. 1. The license holder once again topped the entire Atlantic City market with $44.2 million for December. PointsBet NJ and SuperBook are the other brands operating under the license.
And while the 12-month total of $422.9 million tops Resorts Digital and Borgata combined, it marks a slight 6.4 percent drop from the $451.8 million the Meadowlands earned the previous year. The slight drop is not surprising thanks to the January 2022 launch of New York mobile sports betting. Market leaders such as FanDuel, DraftKings, BetMGM and Caesars are legal on both sides of the Hudson River. This means New Yorkers no longer have to worry about taking the short train rides for placing those NFL bets and this is reflected in the decline in revenue at the Meadowlands.
But will the Garden State take an even bigger hit this year?
The competition among state online sportsbook brands is expected to remain strong, but New Jersey benefits from the tax revenue the industry produces.
Mobile sports betting, taxed at 13 percent, produced almost $94 million in tax revenue ($11.2 million from December). The state’s 12 retail sportsbooks paid just under $4 million in taxes combined (taxed at 8.5 percent).
That the Eagles or Giants will advance to the NFC championship game before January is out should add to the dollars bet on the NFL playoffs.
Meanwhile, the New Jersey number were indicative of the overall U.S. casino revenue for ’22. The commercial casino industry in the U.S. set a new record for annual gross gaming revenue in 11 months of 2022.
With December still uncounted, 2022 GGR was $54.93 billion, breaking the record of $53.04 billion set over the 12 months of 2021, according to statistics released by the American Gaming Association (AGA).
The record revenue number does not include tribal casinos.
In an interview with Forbes, Casey Clark, senior vice president of the AGA, noted that the new record represents a complete recovery from the pandemic and the economic problems it caused.
“To have already surpassed the record numbers we hit in 2021 with a month to spare is really remarkable,” Clark said.
According to numbers quoted by Forbes, 30 of the 33 U.S. commercial gaming jurisdictions reported year-over-year revenue growth for the first 11 months of 2022. Slots and table games generated $43.79 billion, a 6.7 percent increase over the same 11-month period in 2021.
Sports bettors wagered $83.13 billion from January through the end of November, a 65.4 percent increase over the same period in 2021.
“The economy faced a lot of headwinds over the last year or two, but our businesses continued to expand and to grow,” Clark said. “I think we’ve got a strong foundation for continued growth.”