Supplier News
US – Internet launch not enough to save Atlantic City’s figures
By Phil - 17 January 2014
The first full month of New Jersey’s new-fangled online gambling sector brought in revenues of US$7.388m with Borgata accounting for almost half of the December total.
It wasn’t enough however to prevent Atlantic City’s casino revenue dropping below $3bn for the first time in 22 years.
The New Jersey Division of Gaming Enforcement revealed its first internet gambling results since the business began in late November along with its year end results. Total online gambling revenue for the month of December came to US$7.388m, with US$3.35m of that credited to the Borgata. The Borgata, owned by Boyd Gaming and MGM Resorts, reported revenue of US$3.35m whilst Caesars Interactive came second with revenue at $2.03m. The Trump Taj Mahal came in third place but only generated $825,000.
Keith Smith, President of Boyd Gaming, which owns half of the Borgata, said: “Our network has attracted the largest pool of players in the New Jersey online market, allowing us to offer our customers a wide selection of games and table stakes at all times. This gives our network a significant competitive advantage and positions us for further success. When matching our online and land-based databases, we found that 60 per cent of online casino customers had not been to Borgata in over a year, and over 75 per cent had made fewer than two trips to Borgata in the past year. Online and land-based poker revenue at Borgata was up more than 40 per cent from our land-based play in December 2012. Clearly, online gaming is complementary to our land-based business, not competitive.”
2013 marked the seventh consecutive year of falling gambling revenue for Atlantic City, which recorded $5.2bn in 2006.
For the year, industry casino win was $2.9bn, reflecting a decrease of 6.2 per cent from the same period last year. Internet gaming win was $8.4m from the beginning of the “soft play” period on November 21, 2013 through December 31, 2013.
Based upon filings with the Division of Gaming Enforcement, total casino win and Internet gaming win totalled $214.5m in December 2013, compared to $223.5m in casino win last December. The four per cent decrease reflects a 7.4 per cent decrease in casino win, combined with the $7.4m in initial revenues from Internet gaming operations. Of note, December 2013 had one less Saturday compared to December 2012.
Casinos incurred $15.7m in gaming taxes for December, reflecting eight per cent of taxable casino gross revenue and 15 per cent of Internet gaming gross revenue. Those funds are deposited into the Casino Revenue Fund, which pays for programs that benefit qualifying senior citisens and people with disabilities. In addition, the casino industry incurred $2.8m in reinvestment obligations for the month, which reflects 1.25 per cent of casino gross revenue and 2.5 per cent of Internet gaming gross revenue. Casinos are required to reinvest these funds in projects approved by the Casino Reinvestment Development Authority.
Tony Rodio, President of the Tropicana Casino and Resort, and Head of the Casino Association of New Jersey, said: “Obviously it’s disappointing to see another year where it’s a decline but hopefully with the addition of Internet gambling, we will see an increase in 2014.”
