How Did New Jersey and Pennsylvania’s Casinos Fare in 2017?

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Tuesday, January 23rd, 2018 | Written by Shane Larson

Pennsylvania and New Jersey represents the USA’s second and third biggest casino markets respectively, with the former having supplanted the latter back in 2013. Since then, the gap in revenues between the two markets has remained intact, as clearly demonstrated by the annual results just released by the two neighboring states.

Pa Worth $3.22BN in 2017

Pennsylvania’s twelve land based casinos collected $3.22 billion in revenues last year, marking a record high for the state, with government coffers subsequently receiving $1.33 billion in tax revenues from the haul. While the total was just 0.4% higher than the $3.213 billion generated in 2016, the market was mostly let down by its slot machine segment which contracted by 1% to $2.336 billion year-on-year, compared to table games revenues which rose by 4.4% to $890.7 million over the same period.

Pa Soaring Revenues

Interestingly, Pennsylvania’s casino market was originally launched in 2006 offering just slot machines, with table games latter added in 2012 to provide the industry with a further boost. This helped wrestle further market share away from New Jersey, and overall Pennsylvania’s double-digit gains proved to be New Jersey’s double-digit losses, although the situation evened out somewhat after more nearby states also decided to launch casino businesses of their own, including Maryland, Ohio, New York and West Virginia.

While the increase in competition resulted in Pennsylvania’s casino industry contracting after peaking at $3.16 billion in 2012, by 2015 the market reached a new all-time high of $3.173 billion, which has been broken in subsequent years with revenues of $3.213 billion in 2016 (+1.25% yoy), and $3.22 billion in 2017.

Furthermore, Pennsylvania approved a gambling expansion plan last year which will result in further gains to state coffers in 2017, including more slot machines and mini-casinos across Pennsylvania, as well as the launching of a fully regulated online gambling market latter on.

New Jersey Worth $2.66Bn in 2017

Meanwhile, New Jersey’s casino market saw its revenues rise by 2.2% in 2017, and similar to Pennsylvania has now returned two consecutive years of growth, helped in no small part by the launching of its online gambling market in 2013. In fact, New Jersey’s brick-and-mortar casino accounted for$2.41 billion of the state’s overall tally, or 0.3% higher than in 2017, while internet gambling generated a further $245.6 million last year, soaring by 24.9% versus 2016. Internet gambling growth follows a 21% increase in 2014, folowed by 32% growth in 2015, and 25% in 2016.

On the flipside, New Jersey’s online casino revenue may have soared by 30% last year, but online poker continues its downward trajectory after falling by 8.5% in 2017, although there may be a silver lining on the horizon after Pennsylvania’s decision to legalize and regulate its own internet gambling market. Commenting upon expectation for the future, analyst Chris Grove stated:

“Despite poker’s falling numbers in 2017, we expect it to stabilize in 2018. An interstate agreement between New Jersey, Delaware, and Nevada — as well as the possible addition of Pennsylvania — will help to counterbalance New Jersey’s limited online poker player pool, which is the primary force depressing revenues.”

Meanwhile, all of Atlantic City’s seven casinos saw their year-on-year revenues increase in 2017, headed by Borgata with $800 million (4.4%), followed by Tropicana with $390 million (14.6%), Harrah’s with $363 million (1.6%), Caesars with $325 million (7.6%), Golden Nugget with $288 million (14.4%), Bally’s with $211 million (0.1%), and Resorts with $190 million (10%).

There is also further good news in store for New Jersey with two of its shuttered casinos due to open for business later this year, namely the former Revel which will be renamed the Ocean Resort Casino, and the Trump Plaza casinos which will become the Hard Rock Hotel & Casino Atlantic City. Commenting upon the development, Christopher Glaum, deputy director of financial investigations for the Division of Gaming Enforcement, stated:

“With strong growth in Internet gaming win and the anticipated reopening of two former casino properties this summer, I am optimistic that the Atlantic City casino industry can accelerate its revenue growth trajectory in 2018.”

Despite New Jersey having reported a higher growth rate than Pennsylvania in 2017, its market was still worth more than half a billion dollars less than its nearest competitor. Furthermore, New Jersey’s revenue of $2.66 billion is currently around half the value it was worth during its peak of $5.2 billion in 2006.