Two New Jersey retail casinos are turning five on June 28. In celebration, the Hard Rock Hotel and Casino Atlantic City and Ocean Casino Resort promise prizes and parties all summer. As the in-person events illustrate, both commercial casinos cater to land-based gamblers. Those gamblers drive core revenue, despite both casinos partnering with online gambling operators.
The result is surprising, considering Atlantic City’s newest casinos were so gung-ho about iGaming that they announced six months before opening that they’d participate in the marketplace.
When the former Revel Casino debuted as Ocean and the former Trump Taj Mahal became Hard Rock, they already had online casino and sports betting partners.
The latter was an accomplishment because the first online sportsbooks launched in New Jersey in September 2018. That was four months after a US Supreme Court decision allowed states to legalize sports betting.
New Jersey Retail Casinos Jockeyed for Market Share
Today, it’s evident retail casino revenue was always the bread and butter for Hard Rock and Ocean.
Underlining that fact, both casinos are spending the summer running sweepstakes, giving away luxury cars, and setting off fireworks for their retail casino visitors. Only Ocean’s sweepstakes are digital.
Wayne Parry wrote on Monday for the Associated Press:
In terms of total net revenue, … Hard Rock and Ocean’s respective 17.5% and 13.4% market shares seem to have come primarily at the expense of the Borgata, which lost 9.2 percentage points in the last five years, down to 22.3%.
Parry’s statistics come from Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University. Her numbers also show the 20-year-old Borgata Hotel, Casino, and Spa is still No. 1 in revenue among Atlantic City’s nine casinos. Borgata’s online casino gambling revenue figures also top the charts.
That means the newer properties didn’t capitalize on the newer verticals as much as expected.
Bonus tallied year-to-date 2023 revenue figures from January through May:
- For iGaming, Hard Rock holds a 3.6% market share, and Ocean just 2.1%
- For sports betting (online + retail), Hard Rock’s share is 2.5%, and Ocean’s is 0.4%
Meanwhile, Hard Rock and Ocean saw retail operations far outperform the online enterprises.
By the end of 2022, Ocean had a $96 million gross operating profit, up 5.5% from a year earlier. Hard Rock’s profit was $128 million, up nearly 20%, compared with $140 million for Borgata, which was down nearly 20%.
Is Online Casino Cannibalization a False Fear?
When states considered legalizing online casino gambling during 2023, advocates and naysayers alike trotted out tales of New Jersey retail casinos. The latter said iGaming cannibalized commercial casino revenue. Online casino advocates said it augmented bottom lines.
If Hard Rock and Ocean created Borgata’s decrease in retail casino market share and profit, it appears those state legislators may have been blaming the wrong form of gambling for the changes.
The only state to legalize online casino gambling in 2023, Rhode Island, is designating Bally’s Corporation as the site operator. Oddly, there was a brief discussion among lawmakers regarding whether Bally Casino would pull revenue away from the state’s only casinos:
- Bally’s Twin River Lincoln
- Bally’s Tiverton Casino and Hotel