Revenue Declines in NJ For a Second Straight Month Despite Strong Online Growth
For the second straight month, Atlantic City casinos experienced a decline in June despite New Jersey regulated online gaming operators once again generated more revenue when compared to the same period a year ago.
According to the June 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 $216.5 million in June 2015 to $213.9 million in June 2016.
Revenue also declined by 2.7 percent from the $219.8 million reported in May 2016, however, when taking into account that May compared to June has one extra day on a per-day average revenue increased month-over-month by 0.5 percent.
Despite the year-over-year overall revenue decline, revenues from regulated online gaming are booming. Online gaming revenue grew by a huge 40.6 percent from $11.7 million in June 2015 to $16.4 million in June 2016.
June is typically a month where online revenue decline when compared to May due to more players enjoying activities outdoors with the summer beginning. New Jersey online gaming operators, however, bucked the trend with month-over-month revenues declining by a very small 0.8 percent when compared to the $16.5 million in revenue reported in May. Additionally, on a per-day basis, revenues actually increased by 2.4 percent showing that June was actually a stronger month than May for online gaming operators.
One might expect that since revenue declined year-over-year that the amount of taxes contributed to the state would have followed suit. However, due to different tax rates applied to online casino gross revenue (15 percent) and land-based casino gross revenue (8 percent), this was not the case with the tax contribution increasing from $16.5 million in June 2015 to $16.9 million in June 2016.
In addition, $2.9 million in reinvestment obligations was contributed last month to the Casino Reinvestment Development Authority, which represented the same amount contributed during the same period a year ago. These obligations are also contributed at differentiating rates (1.25 percent land-based versus 2.5 percent online).
New Jersey Casinos Experience First-Half Year Growth
Four months of the year, including January, February, May, and June, contributed less gaming revenue in New Jersey when compared to the same months a year ago. However, thanks to very strong growth in March and April, casino revenue for the first-half of the year has grown by a respectable 2.5 percent from $1.22 billion in 2015 to $1.25 billion in 2016.
Online casinos contributed most of this growth showing a 31.7 percent increase from the $72.0 million reported in the sixth-months of 2015 to $94.8 million reported in the first-half of this year. Land-based casinos also increased by a much smaller 0.6 percent from $1.14 billion in the first-half of last year to $1.15 billion this year.
Also, in pure dollar-terms online casinos are contributing the most growth with a $22.8 million year-to-date increase or more than triple than that of the $7.3 million in revenue from land-based casinos.
*Image courtesy of watchdog.org.