As New Jersey Online Gambling Turns Three Years Old, Who’s Winning?

November 21, 2016
As New Jersey Online Gambling Turns Three Years Old, Who’s Winning?

Three years ago, regulated online poker and gambling went live in New Jersey.

Who is winning in the iGaming industry three years later? When you step back and think about it from the starting point in 2013, just about everyone in the state is.

Operators get new revenue stream

Legal NJ online gambling was signed into law in February 2013 by Gov. Chris Christie. It went live late in November of the same year, making this the third anniversary of legal online gambling.

Online gambling revenue started ramping up on the tail end of the closure of four Atlantic City casinos.

For the surviving properties who still had a land-based gaming license, they could offer online gambling, if they chose to apply for an interactive gaming license.

Many of them dove right in. The results for three years made that appear to be a prudent decision.

According to PlayNJ’s online gambling revenue tracker, here are the top-line numbers for the different partnerships in the state, through October of this year.

Operator Total Gaming Win
Borgata / Party NJ $ 133,215,454
Caesars / Harrah’s / 888 $ 99,500,424
Golden Nugget / Betfair $ 83,284,502
Resorts AC / PokerStars $ 39,274,386
Tropicana / Virgin $ 87,057,767

Doing the math, that’s more than $440 million in gross gaming revenue that the state was not realizing previously. And with the land-based casino industry plateauing or perhaps set for growth with the closure of the Trump Taj Mahal, it’s clear at this point that iGaming is not cannibalizing the brick-and-mortar revenue.

The point of allowing iGaming in the state was to help prop up the ailing land-based industry. And in that respect, the mission was accomplished.

State collects taxes

The state is also benefiting from the advent of online gambling.

New Jersey has collected more than $66 million in tax revenue since November of 2013.

The state’s decision to regulate iGaming has generated meaningful revenue for the state of New Jersey, which the ceiling perhaps not event reached yet.

The revenue story of late

Online poker revenue has disappointed to some extent (just $112 million over three years). But the same cannot be said for online casino.

The revenue from online casino has been on a consistent upward trend in New Jersey — $329 million total over three years — with massive upticks year-over-year for pretty much every month in 2016:

NJ historical online gambling

The relatively flat line for revenue for online casino since the spring might show that the market finally hit its ceiling. But that ceiling is still one that with which operators are likely happy through the lens of 2013.

The current individual winners

Moving away from the macro look at the NJ iGaming industry, it’s clear there are operators doing better than others.

While Borgata’s online gambling offerings were the biggest game on the block early on, it no longer is. Right now, the big winner in online casino is the Golden Nugget.

From Online Poker Report on the most recent revenue figures:

The revenue line for Golden Nugget keeps heading up and to the right even as most competitors are flattening out or dropping off. Golden Nugget accounted for 25% of the total online gambling revenue generated in the entire market during October. … it’s still increasingly clear that Golden nugget is exercising a meaningful edge over the rest of the field in New Jersey.

In online poker, we’re still less than half a year into the new world order that includes three iPoker networks, with the addition of PokerStars NJ. But it seems clear the newest entrant is leading the way, despite its late entrance against the Borgata/Party and WSOP/888 networks.

Still, nearly all the casinos in the state — along with their online gambling platform partners — are collecting revenue they weren’t getting before. And that’s a win for a state that took a gamble on legalizing online casinos and poker games.

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