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NJ Casinos Post Gains Even Though Total Market Shrinks

At first glance New Jersey’s gaming revenue report for September wasn’t pretty.

New Jersey’s brick & mortar casinos posted a year-over-year decline of 12% ($240 million in 2013 compared to $209 million in 2014), and this doesn’t take into account the $10 million generated by the state’s online gaming sites in 2014, which means land-based casino revenue actually dropped from $240 million to $199 million – a 17% drop.

However, New Jersey is a much different place today than it was back in September in 2013. The state is transforming (not that it had much of a choice) its gaming industry, and once you get past the initial shock of a 12% year-over-year decline a new picture begins to emerge; a much prettier picture for gaming in Atlantic City and New Jersey.

The reshaping of Atlantic City

The big changes in New Jersey were the addition of online gambling in November of 2013, and the number of Atlantic City casinos shrank from 12 operators to just eight over the course of 2014 – Trump Taj Mahal may also be going the way of the dodo very soon.

This sudden contraction has, for lack of a better metaphor, churned up the ocean floor, and it’s likely going to take months for things to settle back to the bottom in Atlantic City and the new landscape takes shape.

Yes, most of the flotsam and jetsam has been cut free, but it’s going to be a while before we have a good idea what consequences the closures of Showboat, Revel, Trump Plaza, and Atlantic Club will have on Atlantic City.

That being said, this week’s revenue numbers may offer us a glimpse into the future.

7 of the 8 casinos experienced growth or no change

The market as a whole may have taken a double-digit hit, but the remaining casinos in Atlantic City fared much better year-over-year, and should continue to increase revenue as more and more of Showboat’s, Revel’s, and Trump Plaza’s wayward players find new homes on the Boardwalk and in the Marina.

In September of 2013, the eight casinos currently open for business in Atlantic City tallied $190.1 million in revenue. In September of 2014, their tally has grown to $204.3 million. Even removing the $10 million from online gaming, land-based casino revenue among these eight casinos increased year-over-year.

Individually, the outlook is even better.

A full five of the eight casinos posted year-over-year gains (four of the five posted double digit gains), while Resorts and Bally’s AC saw revenues remain flat and drop a meager 2% respectively. The only real loser in September was Trump Taj Mahal, which, as noted above, may not be long for the world anyway.

Yes, total revenue was down 12% year-over-year, but take a look at the individual operators’ revenue numbers from September 2013 and September 2014. They tell a drastically different story:

Casino

September 2013

September 2014

Increase/Decrease

Borgata

$51.7 million

$58.5 million

+13%

Harrah’s AC

$29.5 million

$31.3 million

+6%

Caesars AC

$23.8 million

$26.1 million

+10%

Tropicana

$20.2 million

$23.4 million

+16%

Bally’s AC

$20 million

19.6 million

-2%

Trump Taj Mahal

$22.6 million

$17.5 million

-23%

Golden Nugget

$10.7 million

$16.3 million

+52%

Resorts

$11.6 million

$11.6 million

No Change

Data provided by the New Jersey Division of Gaming Enforcement.

Year-over-year growth likely to continue

To put an even rosier spin on things, Resorts and their iGaming partner PokerStars are expected to launch an online gaming site by the end of the year, and former Ultimate Gaming players (who were generating over $500k a month in revenue) are still looking for homes following the sites departure from New Jersey in late September.

There is also the potential closure of Trump Taj Mahal (which puts another $17.5 million of monthly revenue up for grabs), as well as some $1.3 million in revenue generated by Trump Plaza and another $140k by Revel in September (not listed above).

If The Taj closes, there could be in the neighborhood of $20 million of monthly gaming revenue looking for new homes in the coming months, and it will be the seven remaining casinos in the market that divvy it up.

It should be noted that the Revel is expected to reopen as a casino, which changes things, but shouldn’t change the expected year-over-year growth for the other current operators.  

When we factor in all of these variables, most of, if not all of Atlantic City’s remaining seven or eight casinos will likely be posting year-over-year gains for the foreseeable future – even if the market itself shrinks. 

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Steve Ruddock

Steve is veteran of the the poker industry, first as a player and now as a writer focusing mainly on the regulated U.S. markets and the politics of poker. Follow Steve on Twitter @SteveRuddock and at Google+.

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