NJ online revenue overtakes land-based for first time since 2020

For the first time since the Covid-19 pandemic shuttered Atlantic City’s casinos in 2020, online gambling in New Jersey has outperformed in-person casino gaming.

October’s revenue data from the New Jersey Division of Gaming Enforcement (DGE) revealed internet-based table games and slots generated $213.6m during the month, surpassing the $208.7m brought in by physical casinos on similar games.

By way of comparison, in Q2 2021, casinos in Atlantic City generated a total gross operating profit of $169.4m, as reported by the DGE. New Jersey’s only three independent iGaming operators at the time reported $15.8m in gross operating profit over the same period.

This shift underscores a broader trend in the gaming industry, as online platforms steadily gain popularity while traditional casinos face declining revenues.

October’s online gaming revenue represents a 28.1% year-over-year increase, compared to the 8.5% decline in land-based casino revenue for the same period.

The numbers highlight the diverging trajectories of New Jersey’s gaming landscape. Internet gambling, excluding sports betting, has seen a consistent upward trend, reflecting growing consumer preference for convenience and accessibility. In contrast, traditional casinos, despite their allure and entertainment value, are struggling to regain pre-pandemic footing.

In June 2020, at the height of the pandemic lockdowns, monthly online gaming revenue stood at $84.9m. Fast forward to October 2024, and the sector’s revenue has more than doubled. Meanwhile, land-based casino operations, which brought in $2.36bn year-to-date, are down 1.6% from the same period in 2023.

Sports betting, another significant component of New Jersey’s gaming ecosystem, also experienced a downturn in October.

Revenue from sports wagering fell 16% year-on-year to $77.5m, likely impacted by surprising outcomes in National Football League games that month. Nonetheless, sports betting remains a growth area for the year overall, with gross revenue up 13.9% year-to-date at $912.8m.

The bigger picture

New Jersey’s total gaming revenue for October 2024, encompassing casinos, racetracks, and their online partners, reached $499.8m — a 2.6% increase from the $487.1m reported in October 2023. Year-to-date, total gaming revenue rose 9.3% to $5.22bn.

While iGaming has surged ahead, land-based casinos remain a vital part of New Jersey’s economy, offering options online platforms cannot replicate. However, their future may depend on how effectively they adapt to this digital age.

Atlantic City’s casinos, once hailed as a revitalisation strategy for the struggling New Jersey seaside resort town, have faced significant challenges since their inception in 1978. Initially launched to compete with Las Vegas, the casinos promised to drive tourism, create jobs, and generate tax revenue.

During the late 20th century, Atlantic City thrived as a gambling hub, but the rise of casinos in Pennsylvania, New York, and Connecticut in the early 2000s eroded its market share. By 2014, four casinos in the city shuttered, citing declining revenues.

The closures led to significant job losses and further economic hardship for the city, which was already grappling with high poverty rates and declining property values. The resulting financial strain required state intervention, including loans and restructuring efforts, to stabilise the local economy and prevent bankruptcy.

Despite these challenges, Atlantic City continues to receive government support aimed at diversifying its economy. Programs to redevelop non-gaming attractions and improve infrastructure reflect efforts to reduce reliance on the volatile casino industry.

The state’s gambling landscape may look drastically different in the coming years, driven by technological advancements and strategic moves by industry players. It will also be reshaped significantly by the continued expansion of online gaming.

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