October marked a historic milestone for online gambling as New Jersey online casinos outperformed Atlantic City’s retail casinos in gross gaming revenue for the first time ever in a non-pandemic month. While this achievement underscores the growing success of iGaming in the US, there are likely to be some who attempt to use it as an argument against online casino expansion in other states.
According to the latest report by the New Jersey Division of Gaming Enforcement (DGE), online casinos brought in $213.6 million in October, an increase of 27.3% compared to last year. By contrast, the $208.7 million earned by Atlantic City’s nine casinos represents a year-over-year drop of 8.5%. The state’s total gaming revenue in October—which includes sports betting and horse racing—was $499.8 million, up 2.6% year-over-year.
The main argument for legalizing online gambling is the tax revenue it brings in. New Jersey online casinos have now produced just over $1.4 billion in tax revenue since they first launched in 2013. Their continued growth only serves to enhance that argument. However, the simultaneous decline of retail casino revenue could also become a talking point for online casino opponents, who believe one comes at the expense of the other.
iGaming Surges While Retail Casinos Struggle
October marked the third consecutive record-breaking month for New Jersey online casino revenue. It increased 2.6% compared to September, the first month iGaming surpassed the $200 million mark. So far, in 2024, online casinos have generated $1.95 billion, up 23.7% from 2023.
Meanwhile, retail casino revenue tells a different story, showing that commercial casinos generated 9.5% less than in September. That number should be expected as retail revenue drops as the fall and winter approach. Year-to-date, Atlantic City casinos have brought in 1.6% less than in 2023. The $208.7 million won in October was the second-worst month this year after January. It was also the lowest October revenue since 2020 when restrictions due to COVID-19 were in place.
These numbers show the growing importance of online casinos for the gambling industry in New Jersey. According to Jane Bokunewicz, faculty director of the Lloyd D. Levenson Institute of Gaming, Hospitality, and Tourism at the Stockton University School of Business, the trend is becoming more evident. She told PlayNJ:
Year to date, brick-and-mortar casino revenue has decreased 1.6%, ($2.36 billion year-to-date 2024 compared to $2.40 billion in 2023) while total gaming revenue has increased year-over-year by nearly 8% ($4.70 billion in 2024 compared to $4.36 billion in 2023) — likely again due to the strong performance of internet gaming and sports betting. While it is common to have fluctuations in all areas of gaming revenue, brick-and-mortar revenue in 2024 has been particularly variable this year — gaining over 2023 in some months while declining in others.
Online Revenue Records Could Hinder Efforts Elsewhere
Atlantic City casino revenue decline could be attributed to many factors, including climate change and shifting consumer behavior. However, iGaming surpassing them could harm online casino legalization hopes in other states with cannibalization concerns. While regulators from iGaming states, including DGE’s former director, David Rebuck, agree that online casinos don’t cannibalize retail casinos, many iGaming opponents remain unconvinced.
One of the opponents’ most common concerns is that online casino legalization will result in reduced jobs in the sector. Cannibalization concerns were one of the main reasons iGaming legislation was unsuccessful in 2024 in a few states. One example is New York. There, iGaming saw fierce opposition from the Hotel and Gaming Trades Council, a casino workers’ union. Maryland was among the states that had hopes of legalizing iGaming, but the proposal there fell short, with cannibalization as one of the reasons.
Some prominent casino operators, including Cordish Companies, Churchill Downs Inc., and Sands Corporation, have been vocal opponents of iGaming. They argue that online casinos could take revenue away from their retail properties and could use New Jersey’s data to solidify their stance in states where legalization efforts are ongoing.
About the Author
