Sports betting boosts Atlantic City casino revenues
Atlantic City casino revenue was up 20% year-over-year in November with legalized sports betting driving some of the spike, according to analysts.
New Jersey’s Division of Gaming Enforcement released figures Wednesday showing that the state’s total casino industry revenue last month rose to $247.65 million from $206.4 million in November 2017. It marked the sixth consecutive month of gambling revenue growth in Atlantic City, which saw its casino property count rise to nine from seven in late June with the opening of the Hard Rock Hotel & Casino and Ocean Resort Casino. Year to date, the casino industry’s total gambling revenue was up 6.5%.
James Plousis, chairman of New Jersey’s Casino Control Commission, said that the inception of legal sports wagering in Atlantic City casinos has played a role in the revenue uptick. He noted that the gaming industry’s revenue from sports betting was more than 81% higher in November than October and that the state’s total sports wagering handle is already near the $1 billion mark at $928 million since launching in June.
“November was another strong month for the casino industry,” said Plousis in a statement. “The stage is set for 2018 to be the third straight year of growth in Atlantic City.”
Sports betting revenue came in at $11.5 million for November at the eight Atlantic City casinos that take wagers. Since legalization took effect, sports betting has generated $40.8 million for Atlantic City and $73.2 million statewide, according to the new DGE figures. New Jersey’s sports wagering gross revenue totaled $21.2 million for the month.
Dustin Gouker, lead sports betting analyst for PlayNJ.com, said much of the casino revenue boost was due to the addition of two new casinos, but that sports betting has also played a role in driving increased traffic to the properties. He added that sports betting has also enabled continued momentum for online casinos with internet gaming revenue up 30.7% in November from the year ago-period and 19% for 2018.
“It probably has an additive effect in that sports betting is another acquisition channel for some of the casinos, where they can cross-sell them from sports book to casino gaming.” said Gouker. “[Large casinos] have the ability to get a sports bettor and perhaps transition them to their casino product.”
While Atlantic City’s casino revenues are on the upswing, gross operating profits for the gambling industry were down 15.3% in the third quarter, according to a late November DGE report that signaled concerns about whether the city cans support nine casinos. However, the same report also showed increased spending at the city’s casinos with net revenues 17.8% higher than the 2017 third quarter.
Moody’s Investors Service cited Atlantic City’s improving casino industry as one of the reasons it gave Atlantic City a four-notch upgrade on Nov. 1 to B2 from Caa3. The debt ridden city was also boosted four notches by S&P Global Ratings to B from CCC-plus in October following fiscal improvements enacted during two years of state control.
New Jersey collected $2.45 million in taxes on sports betting in November and has totaled $7.98 million since legalization took effect in June. The state is on pace to exceed the $13 million of revenue State Treasurer Elizabeth Muoio estimated in May would be generated for the 2019 fiscal year that began July 1.
The Garden State has an 8.5% sports betting tax for land-based venues and 13% tax for online/mobile wagers. Gov. Phil Murphy signed a bill in October that funnels an additional 1.25% of sports betting revenue toward the state’s Casino Reinvestment Development Authority starting in December. The state’s casino investment alternative tax from the CRDA was directed toward Atlantic City debt service two years ago under the state takeover plan that took effect on Nov, 9, 2016.