Flat Month in NJ: Online Revenues Grow in May Offset By a Slump in Atlantic City
Online revenue from regulated New Jersey operators grew in May, while land-based casinos in Atlantic City slumped, resulting in a flat month when compared to one year ago.
According to the May 2016 Gaming Revenue Results financial report released by the New Jersey Division of Gaming Enforcement, total casino revenue in the Garden State declined by 0.6 percent from $221.1 million in May 2015 to $220 million in May 2016.
Despite the small decline, online casinos experienced a significant growth of 32.6 percent with $16.5 million in online revenues reported in May 2016 when compared to the $12.5 million reported the same period a year ago.
May's year-over-year market growth was almost equally contributed between online casino and online poker. New Jersey's regulated online poker revenues grew by 33.3 percent ($2.6 million versus $1.9 million), while online casino revenue grew by 32.5 percent ($14 million versus $10.5 million).
However, the reason the overall revenue declined was due to a small 2.5-percent decrease in land-based operations with $208.6 million reported in May 2015 compared to $203.3 million reported this past month.
Despite the overall decline in revenues, the amount of taxes contributed to the state has increased year-over-year from $16.8 million in May 2015 to $17.3 million in May 2016. This is due to the different tax rates applied to online casino gross revenue (15 percent) and land-based casino gross revenue (8 percent). Additionally, $3 million in reinvestment obligations was contributed last month to the Casino Reinvestment Development Authority compared to $2.9 million in May 2015. The obligations are contributed at differentiating rates (1.25 percent land-based versus 2.5 percent online).
New Jersey Casinos Experiencing Year-To-Date Growth
Thanks to gains in previous months, overall year-to-date revenues grew by 3.3 percent from $999.9 million during the first five months of 2015 to $1 billion in the first five months of this year.
While percentage-wise most of the year-to-date growth can be attributed to online casino revenue, in true dollars it is pretty close to being evenly contributed by land-based casinos.
Year-to-date online casino revenues grew by $18.1 million, representing a 30-percent growth with $60.3 million reported in the first five months last year compared to $78.4 million recognized in the first five months this year.
Land-based casinos increased by only 3.3 percent in the first five months of this year when compared to the first five months of last year, however, due to the large numbers involved this represents a $14.7 million growth ($954.3 million versus $939.6 million).
*Image courtesy of watchdog.org.