Online Gaming Helps AC Casinos Weather The Winter Storms

Steve Ruddock March 15, 2018 1556 Reads
AC Casinos

Severe weather was a factor in Atlantic City casinos getting off to their worst two-month start in recent memory. But as they say, every cloud has a silver lining, and the disruptive weather was no exception.

With land-based casino revenue in the tank, the weather helped demonstrate how beneficial the addition of online gambling has been to the market, because without online gambling, the first two months of 2018 would have been much worse.

Furthermore, it may have uncovered a new benefit for states prone to snowy winters.

The benefits of online gambling

Online gaming is at the forefront of a gaming renaissance in Atlantic City.

Following a decade of decline, land-based casino revenue has increased in each of the last two years, with the turnaround believed to be in large part because of additive effects of online gambling.

There’s complete agreement among the land-based casinos that operate online gaming websites in New Jersey, rather than cannibalistic, online gambling has been beneficial.

According to the casinos, online gambling is helping on all fronts:

  • connecting with new customers;
  • reactivating lapsed customers; and
  • increasing spend and visitation of existing customers.

The severe winter storms that hammered New Jersey in January and February have managed to uncover yet another benefit of online gambling: When you can’t come to the casino, the casino can come to you.

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Winter storms bring the Northeast to a standstill

Multiple winter storms effectively shut down entire parts of the Northeast in January and February, Atlantic City included.

With people stuck in their houses, the weather wreaked havoc on Atlantic City casino revenue in January and February (and storms in March are likely to bring similar results).

Not surprisingly, land-based casino revenue fell 12.6 percent in January and 8.9 percent in February.

Short of power outages, online gaming isn’t at the mercy of Mother Nature.

As such, the precipitous drops in land-based casino revenue were softened by rises in online gaming revenue of 16.7 percent and 17.5 percent.

Upshot #1

Thanks to online gaming, total casino revenue during the first two months of 2018 was down 9.9 percent and 6.5 percent, instead of 12.6 percent and 8.9 percent.

Winter happens every year in New England

Other Northeast states considering online gaming legislation should take notice. Not only did online gambling provide a softer landing for revenues, but it provided an outlet for people who would have visited the casino had weather permitted. It’s quite likely that the inability to travel to Atlantic City was part of the reason that January and February were record-setting months for online gaming revenue.

The casino industries in Massachusetts, Rhode Island, New York, and Connecticut are all as or more susceptible to winter storms than New Jersey, and all it takes is one storm to decimate casino revenues for the month.

Worse, a really bad winter could decimate casino revenues for the year, and cost casinos tens-of-millions of dollars (the January and February storms alone cost Atlantic City casinos some $40 million in revenue).

March saw Massachusetts take not one, not two, but three Nor’Easters on the chin in the span of two weeks, the last dropping upwards of two feet of snow on parts of the state.

And this winter isn’t some once in a generation anomaly.

Boston was buried in snow during the winter of 2014/2015, with over 80 inches falling in a three-week span, and a record-setting 110 inches falling for the season. The snow, combined with historical frigid temperatures, meant that no one wanted to go outside if they could avoid it. February 2015 has been called the most extreme weather month in New England history.

Upshot #2

Online gaming could help casinos in the Northeast protect themselves from a loss of revenue caused by severe winter weather.

If your customers can’t come to you, it’s nice to be able to go to them.