Online gaming revenue saves struggling New Jersey casinos

On Wednesday, the New Jersey Division of Gaming Enforcement (DGE) released the official financial figures for the month of March. It is not surprising that the numbers were significantly lower than the previous months considering the land-based Atlantic City casinos were shut down midway through.

New Jersey is unlike most other US states in that it offers online casino gambling as well as sports betting. However, the stats have shown that the land-based casinos are the major driver of the state’s gaming revenue, and that aspect took a bit hit with venues closing their doors on March 16 due to the coronavirus issue.

This year there was no March Madness, no MLB opening-day games, and no land-based casino revenue after the 16th of the month. The total gaming revenue for March 2020 was $85.5 million, which pales in comparison to the March 2019 haul of $223.2 million.

With the land-based casinos closed, online casino revenue spiked to the tune of $64.8 million, which is a year-on-year increase of more than $25 million. While online poker forms only a small part of the overall gaming revenue for New Jersey, that saw a big jump with $3.6 million taken compared to $1.9 million in March 2019.

With most sports leagues suspended and major events either canceled or postponed, the sports betting revenue total for last month was $13.2 million compared to $31.7 million in March 2019. The total sports betting handle was $181.9 million, nearly 90% of which was wagered online. The parlay profit for the first quarter of this year came to 18.1%, which is significantly better than the overall 7.3% hold for the year to date.

Here is the New Jersey revenue split for March:

• Land-based casinos – $85.5 million (52.2%)
• Online casinos – $64.8 million (39.4%)
• Sports betting – $13.2 million (8.1%)

In 2019, land-based casinos accounted for 77.5% of the total $3.47 billion in revenue. New Jersey online casinos contributed 13.9% and sports betting made up 8.6%.

It is no surprise that the outlook for the April revenue numbers is bleak. Out of the three major revenue streams, online casino gaming is the only one that will surpass the total from April 2019. Land-based casino revenue will suffer the biggest hit, dropping 100% to zero. Sports betting had revenue of $21.2 million in April 2019, but with the lack of sports events being played means that number will be much lower this month.

In April 2019, New Jersey received $23 million in taxes from gaming, but estimates this month are 10% of that total. One thing the Garden State has going for it is that it’s doing better than neighboring Pennsylvania, which has a higher tax rate.

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