The New Jersey casino industry has weathered every possible type of storm.
Some literally, like “Superstorm Sandy” in 2012, which wrecked part of New Jersey’s coastal infrastructure. Economic downturns have had an impact. Even Donald Trump has left his legacy.
Now is another changing time for the NJ casino industry. Is inflation about to curb the market? Has the market grown saturated with too many options for players? Or has the rise of sports betting and iGaming come at a crucial juncture to make the activity profitable for the next decade?
“Inflation presents a risk to casinos in that casino patrons may have less discretionary income to spend on gambling and other leisure activities after paying their bills,” said Jane F. Bokunewicz, PhD and faculty director at the Levenson Institute of Gaming, Hospitality and Tourism at Stockton College in South Jersey in an email to PlayUSA.
“It is difficult to tell exactly how inflation currently is impacting the Atlantic City casinos because there are so many variables in play, including the recovery from COVID-19 and increases in internet gaming and mobile sports betting.”
Will the real New Jersey casino industry please stand up?
In order to examine the impact of today’s economic realities on the casino industry, it would help to define the many branches of that industry right now.
There is the main brick-and-mortar casino that turned Atlantic City into a destination spot for travelers all over the world. But that’s old-school now.
The casino industry offers players the opportunity to use slot machines and poker from home using online software and platforms. This, called iGaming, exploded when the state was locked down due to the COVID-19 pandemic.
“In places where online gaming is legal, traditional operators embraced it as much as possible,” said The AlphaNews in a report on the state of gambling.
“As a result, they’re seeing doubling internet gambling revenues compared to before the pandemic.”
Sports betting is different. Traditional casino names like Caesars and Bally’s offer apps and platforms for sports bettors, but that market is also sliced into many pieces, with companies like FanDuel and Barstool getting a lot of action.
There is no FanDuel-branded casino, at least not yet, but they do run sportsbooks inside many brick-and-mortar sites.
“Internet gaming and mobile sports wagering has been a lifeline to casinos, especially during COVID-19 closures and restrictions,” said Bokunewicz.
“Online gambling, however, is no substitute for the experience brick-and-mortar casino gambling provides, including hotel amenities, restaurants, live entertainment, and bars and nightclubs.”
Help is on the way in New Jersey
Another way to know if the New Jersey casino industry is really struggling? Just look at the signs in windows. These days they read “help wanted.”
Businesses don’t hire people if they think business is going to be bad.
“As of February 2022, the NJ Division of Gaming Enforcement employment report shows that casinos still have not returned to pre-pandemic employment levels,” said Bokunewicz.
“Coupled with the anticipation of a strong summer season, this presents an even greater challenge than usual for finding seasonal staffing.”
And how many stories do you have to read about record-breaking revenue months in New Jersey?
Clearly, the main idea is to funnel that money back into personnel and new experiences to offer the player. Places are offering hiring bonuses, flexible hours, and even some stock options to either bring old employees back or entice new ones.
The New Jersey casino variants
People may be cautious about returning to in-person gaming, but the casino industry is trying to alleviate fears about that too. New casinos are designing surfaces that have antimicrobial features built-in or the ability to be hands-free.
“Spin!” players might just speak into the slot machine after placing a bet on the app on their phone. (Yes, really).
Is that enough to mitigate the impact of inflation in New Jersey? Maybe not completely, but every little bit helps.
“It is interesting to note that March in-person, brick-and-mortar spending revenue at Atlantic City casinos was below pre-pandemic 2019 while January and February exceeded pre-pandemic levels. Inflation may have been a factor in the March results,” said Bokunewicz.
The Jersey shore to casino
The New Jersey casino industry already faces one problem that doesn’t exist in other states. There is a virtual paradise along the coastline of the Atlantic Ocean.
Hotels and beach houses exist just steps away from the water. The Jersey Shore is not just an awful MTV show, it’s a cultural touchstone for generations in New Jersey. It even has its own language – “Bennies” (a derogatory name for outsiders) and “Down The Shore.”
Come summer, the Garden State Parkway is a battle for 40 miles to get down to Seaside Heights or LBI and every small town in between, and Atlantic City too. When New Jersey residents go Down The Shore, they also go down to AC. The summer is traditionally the busiest quarter for Atlantic City casinos.
“Visitors come to Atlantic City to experience all of the shore amenities including the beach, Boardwalk and outdoor activities in addition to the casino experience. This boosts revenue in many sectors of the economy,” said Bokunewicz.
“Since COVID-19 and the shift to working from home, many people are enjoying their summer homes in the off season which could have a positive impact on visitation to Atlantic City year round.”
Inflation – forget about it?
The landscape of Atlantic City and the New Jersey casino industry has definitely changed in the last two years, but it was already evolving like the waves of the ocean.
Inflation may keep down some revenue projections, but luck was on the industry’s side. It responded to the pandemic with increased iGaming offerings that have been a boon to the bottom line. Sports betting revenue has been another major influx of cash.
A casino in New York City could be the next big obstacle the New Jersey industry has to face, but here, we don’t worry about things we can’t control. As the poet Bruce Springsteen once sang, “down the shore, everything’s alright.”