Share
For the first time, online casinos in New Jersey won more money from players over the course of a month than their land-based counterparts in Atlantic City. October 2024 saw the state’s online gambling sites take in $213.6 million, about $4.9 million more than retail casinos—and that’s not even counting sports betting.
New Jersey is one of the three biggest markets for regulated online casino play in the United States, and the longest-running of those. Other states thinking about legalizing iGaming look to the Garden State’s policies and outcomes for guidance. However, careful interpretation of the data is important.
Opponents of expansion could take this milestone as evidence that online casinos are pulling revenue away from in-person gaming. However, on closer inspection, the data doesn’t support that leap. The continued growth of New Jersey online casinos is providing benefits for Atlantic City’s retail casinos, too.
New Jersey online casinos put up more record numbers
In addition to surpassing win from play at brick-and-mortar casinos in New Jersey for the first time, October’s online casino win total of $213.6 million also represented a new single-month record in New Jersey. The previous record from September 2024 was $208.1 million.
The total for October represented an increase of about 27.3% compared to October 2023. That keeps the running total for the current fiscal year at an improvement of over 20% compared to what was a record period in FY2023-24.
Should gains continue at that pace, FY2024-25 will shatter that previous high. Despite the perception on the surface, Atlantic City is not suffering similar declines.
Atlantic City casinos holding steady
While October 2024 does represent the worst such month for Atlantic City casinos since 2020, the win total of $208.7 million is still marginally better than the sum for October 2019 ($202.5 million). Moreover, losses are not equal across the board for all nine casinos in Atlantic City.
For example, Caesars Atlantic City actually had a slightly better month in October 2024 ($14.9 million in win) than it did in October 2023 ($14.4 million). The Tropicana improved on October 2023 by about 6.9% in October 2024 as well.
While those gains were offset by year-over-year shortcomings at the other seven properties, none of the declines were on the same level as the gains for New Jersey’s online casinos. That points to an important consideration for expansion conversations.
Correlation is not causation
An important consideration in any evaluation is that just because two phenomena are happening simultaneously does not mean that they affect each other. For instance, the sky over a particular area may be cloudy on the same day that a player wins a big progressive jackpot playing online slots. That does not mean that players only win such prizes when the sky is cloudy.
That’s an extreme example, but the premise applies nonetheless. Rapid gains in online casino win in New Jersey are not the primary, much less sole cause of slight downturns in win for Atlantic City casinos.
If online casinos were directly cannibalizing Atlantic City casinos, win for those commercial casinos would be down proportionately to the amount that online casinos are up. As previously mentioned, Atlantic City casinos only saw a marginal year-over-year decline for October while online casinos are up more than 27% in the same comparison.
Additionally, those losses would be uniform across all nine properties. That is not the case.
That isn’t to say that online casinos have no fiscal impact on Atlantic City gaming facilities. That effect is mostly positive, though.
Atlantic City casinos get cut of online action
In New Jersey, licensed online casinos operate in partnership with the nine Atlantic City properties. As part of that deal, the Atlantic City casinos get a cut of the win that online casinos bring in.
The terms of those contracts are not public, so it’s unclear exactly how much each licensee pays to its land-based partner. The strong likelihood is that win from in-person gaming is still far more lucrative for physical casinos.
Regardless of these facts, those contracts could get revisited if online casino win continues to outperform in-person gambling. A date in the near future sets the stage for such negotiations.
Online casino renewal coming in 2028
In 2023, New Jersey extended the legislation that allows for regulated online casino play in the state a further five years. Should online casino win continue to grow while land-based gaming is stagnant, another extension could come with different parameters.
The state may look at mandating a bigger cut to Atlantic City casinos or consider raising the tax rate for online casino win. A bill to raise that rate from 15% to 30% surfaced in Trenton in early 2024.
Online casino play took its first step toward being the most popular form of gambling in New Jersey in October. It’s more evidence of how valuable that vertical is for other states to consider.
