<body><div><figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=2k4vT1_0wEd6NXc00" alt="https://img.particlenews.com/image.php?url=2k4vT1_0wEd6NXc00" width="1000" height="600" ></figure>In September, New Jersey reported $558.3 million in gross game revenue. The revenue is derived from casinos, sports betting, igaming and racetracks with sports betting. Broken down by segment, the nine casinos in Atlantic City generated $230.6 million in GGR. Sports betting produced $119.5 million, $55.9 million of which came from the two racetracks, Meadows and Monmouth Park. The win from igaming was $208.1 million, 37 percent of the gaming revenue in September. Year to date, igaming is generating 36.6 percent of the revenue in New Jersey. It is reasonable to assume that in a year, igaming will be generating more revenue than the casinos and that the trend will continue creating problems, if not a crisis, for the casinos. In 2006 before Pennsylvania and other surrounding states legalized gaming, casinos in Atlantic City generated $468.8 million and that was without sports or igaming. The highest month for GGR in Atlantic City was July 2005 at $504 million. The New Jersey casinos have been on a long decline since Pennsylvania legalized slots. The situation was exaggerated by the Great Recession, then again by the pandemic. In July, the Atlantic City casinos generated $272.3 million, a 46 percent decline from the peak in 2005. The narrative is much the same in Pennsylvania and Michigan. Igaming in Pennsylvania in September was $176.7 million, 35 percent of total GGR in the state. In Michigan, revenue from igaming was $202.5 million, 55 percent of the state’s total GGR.Given the popularity of igaming, it is surprising that more states have not legalized it. Of course, igaming in Connecticut, West Virginia, Delaware and Rhode Island hasn’t reached the level it has in the big three. Still, igaming expansion is almost certain to happen. The question of when is most likely economic. In the expansion of casinos in the past 35 years, more states legalized gaming under budget pressures. Pennsylvania was looking for a way to reduce taxes, Illinois had major capital projects to finance and Massachusetts wanted to create more jobs and economic development. As the process of expansion continued, states also looked at initial licensing fees as a source of revenue. Tax rates also got higher and became important revenue sources. After the post-pandemic surge, casino revenue across the country flattened out. Now, if states need more revenue from gambling, it will be necessary to raise taxes on casinos or add more casinos or more gambling options. Most states have sports betting, so igaming is the logical next step. In the meantime, it might be good to look at the effect of igaming on existing casinos. Casino revenue is on a decline not only in New Jersey, but also in Michigan and Pennsylvania. There is more than one cause for that decline. In each case, there is much more competition from neighboring states than when casinos were introduced. New Jersey had the only casinos for 3,000 miles when the casinos opened on the Boardwalk in 1978. Michigan and Pennsylvania did not have that large of a market area, but they were substantially larger compared to today. More competition, meaning fewer customers, is one cause. More options for the customer to spend money on is another. In the early years, food, entertainment, shopping and lodging were much smaller parts of a gambler’s budget than today. Las Vegas generates more revenue from those sources than it does from gambling. No other state comes close, but most casinos are striving to obtain it.Igaming plays into that mix. Customers who gamble from home probably go to casinos less often. And if they do go, their budget is likely to be smaller because of online gambling. To the state, it does not matter. It gets a cut of action either way. To the casinos, it very much matters. The casinos in Atlantic City are holding on, but in a couple of years, the other shoe is going to drop when New York City has three full-fledged casino resorts. Even without casinos in New York City, Atlantic City casinos are producing less revenue year over year. As a result, they will have less capital to reinvest in their casinos. And that makes them more vulnerable to newer casinos, like those contemplated in New York. Less investment will mean fewer customers and less revenue. Igaming is adding to the cycle. It is a vicious circle.</div></body>

Mountain View, CA

NewsBreak

Igaming is part of a vicious cycle of decline in Atlantic City

In September, New Jersey reported $558.3 million in gross game revenue. The revenue is derived from casinos, sports betting, igaming and racetracks with sports betting. Broken down by segment, the nine casinos in Atlantic City generated $230.6 million in GGR. Sports betting produced $119.5 million, $55.9 million of which came from the two racetracks, Meadows and Monmouth Park.