The early numbers were relatively modest, but revenue for the casinos and their partners doubled from 2015 ($148.9 million) to 2018 ($298.7 million).
Then came another massive uptick in 2019 ($482.7 million) and then – due largely to the COVID-19 pandemic that shuttered all Atlantic City casinos for several months – another doubling to $970.3 million in 2020.
A gradual easing of pandemic visitation restrictions didn’t stop the industry from achieving further gains in 2021 ($1.366 billion) and 2022 ($1.662 billion). Those exponential increases in revenue proved perhaps to be a literal lifesaver for some casinos at a time when there has been speculation that one or more of the city’s nine casino properties might not survive long-term.
And while the pandemic has now faded into just a grim memory, the numbers through October in New Jersey indicate a modest rise again this year – keeping the “undefeated” mark intact of ever-rising online casino revenue.
Of course, state taxpayers are also reaping benefits, as $249.3 million went into the state Treasury in 2022, and slightly more will result in 2023. The 10-year tax collection total for New Jersey online casino gaming has been a few dollars north of $1 billion.
Atlantic City casino operators were persuaded before the launch of the new gambling that not only would online casino gaming not destroy their retail casino revenue, but the minor potential decline in such revenue would be dwarfed by their share of online casino money.
Indeed, of the $7 billion in online casino revenue over the past decade, the casinos have collected a little over $2 billion of that money while their partner operators – who do all the work – retain the rest.
So Why Aren’t More States Legalizing Online Casino Gaming?
Those who have followed gambling legalization expansion efforts over the past decade generally have been most surprised by two seemingly contradictory results – the quick, passionate embrace of sports betting by lawmakers and a strong resistance to online casino gaming by many of those same lawmakers.
The U.S. Supreme Court‘s decision to strike down a 1992 federal law that effectively had given Nevada a monopoly on legal sports betting was announced in May 2018.
Yet in just half the time span of the online casino legalization era, more than three dozen U.S. states have launched sports betting.
Online casino? Legal, full-fledged play is only underway in New Jersey, Delaware, Pennsylvania, West Virginia, Michigan, and Connecticut – plus Rhode Island is joining the group in spring 2024, and Nevada has long offered online poker only.
Any legislator who backed sports betting legalization as a way to generate new tax revenue would be hard-pressed to explain why they would not have the same sentiment about online casino play. The $93.9 million New Jersey took in for 2022 in mobile NJ sports betting tax revenue is barely one-third of the amount provided by online casino gaming.
A number of experts have concluded that many lawmakers are familiar with sports already and somewhat with betting on games as well – legally or illegally. However, allowing state residents to play casino games in their own homes has been met with resistance.
That’s even though while it is true that a game of blackjack or poker takes very little time versus a two-hour to three-hour wait for a traditional sporting event wager to be decided, that is not at all how many consumers gamble on sports.
“In-play betting” is wildly popular, with gamblers able to try to predict if a football team will score on the next drive or if a baseball team will score a run in the next half-inning, for example.
So, concerns that online casino gaming would be much more dangerous to at-risk compulsive gamblers seems unfounded – without even accounting for the fact that such gambling at illegal, offshore websites is rampant in every U.S. state.
Retail Casinos Will Have a Say in Online Casino’s Gaming Future
Some elected officials, as well as retail casino operators, continue to be caught up in the “cannibalization” theme. But that same sentiment held true in New Jersey as well – before the casino owners came to understand a decade ago that the brick-and-mortar casino visitor group doesn’t heavily overlap with younger, more internet-savvy potential online casino players.
Also, the partnership of every online casino operator in New Jersey with a land-based casino owner means that the latter properties gain revenue from online casino play. Furthermore, the cooperation allows for those casinos to market themselves to online casino players who otherwise would likely never set foot in Atlantic City.
But lawmakers – many of whom are unfamiliar with the intricacies of the gambling industry – likely will take pause if the casino owners in their state object to online casino legalization bills.
The number of casino operators in each state is also relevant. In New Jersey, Borgata, Golden Nugget, and Resorts combine for more than two-thirds of the total online casino revenue.
Borgata is paired with BetMGM, Golden Nugget with FanDuel, and Resorts with DraftKings. The more casino operators there are in a state, the more likely there is opposition from those who don’t expect to be able to land a deal with those three dominant partners.
The most likely states to add online casino gambling in 2024 are widely believed to be New York, Illinois, and Maryland.
The most intriguing state is New York, which would be the largest U.S. state to legalize online casino gaming. State Sen. Joseph Addabbo and Assemblyman Gary Pretlow published an opinion piece earlier this week with an eye-catching number.
“We are working on legislation to authorize iGaming and iLottery in New York, and we are optimistic that this session, we can turn it into law,” they wrote. “The bill uses the same framework in place for mobile sports betting, allowing consumers to safely play in a legal and regulated market while generating a projected $1 billion annually for New York.”
The impact on New Jersey’s annual online casino revenue would not likely be large – mainly just of profits from the loss of New York residents gambling online in New Jersey while heading back home from their jobs via mass transit.