New Jersey Online Gambling Revenues Down Again In May

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Friday, June 13th, 2014 | Written by Shane Larson

The New Jersey Division of Gaming Enforcement (DGE) has released its online gambling figures for May, revealing an 8.39% decline in revenues to $10.47 million, compared to the $11.43 million taken in April. From that total, casino games were down by 7% to $8.2 million, while online poker had also fallen by 12% to $2.6 million.

New Jersey introduced online gambling back in November 2013, but by April had reported its first ever fall in revenues. Now with May’s lackluster results, NJ has experienced two consecutive months of declining revenues.

IGaming revenues below par

For the first six months of its operation, The Garden State has now generated $61.9 million in online revenues, making Governor Chris Christie’s initial estimate of $1 billion for Year 1 appear a gross overestimation. After the state’s monthly igaming figures started coming in, though, gaming analysts soon were forced to reduce their estimates to just $200 million but even that tally might need to be halved.

The Borgata (bwin.party) which has been the online industry leader since last year, recorded its first ever online decline last month with revenues dropping to a little over $4 million, down from the $4.11 million generated in April, and the $4.39 million in March. Nevertheless, Borgata still controls 38% of the igaming market.

Nearest rival, Caesars Interactive (888), also reported a fall off in revenues to $2.8 million in May, compared $3 million a month earlier. Meanwhile, Tropicana (Virgin/Gamesys) revenues shrunk from $2.1 million in April to $1.9 million in May; Trump Plaza (Betfair) plummeted from $926,278 in April to $677,453 last month; the Trump Taj Mahal (Ultimate Gaming) dropped from $609,450 in April to $497,728 in May; while the Golden Nugget bucked the trend slightly, by improving from $575,914 in April to $610,949 in May.

Revenues down despite rise in online accounts

According to the New Jersey Division of Gaming Enforcement (DGE), the state’s diminishing revenues in May comes at a time when the NJ industry actually experienced an upsurge in new players opening internet gambling accounts, with numbers improving by 8.9% to 351,136 last month. In contrast, however, Nevada is currently reporting unprecedented traffic and customer sign-ups as the 2014 WSOP continues to drive players to its WSOP.com website.

Online poker continues decline

In May online poker fell by 12% to $2.6 million, with analysts seeing NJ’s latest online poker results directly related to seasonal trends, as online poker players seek other pursuits during the warmer summer months. Nevertheless, May’s result still came as a big disappointment for the state, which had previously reported a 28% increase in January, 9% rise in February, and 15% in March.

Breaking the figures down further, Borgata/partypoker saw its poker revenues drop 13.2% to $1,206,261, with the operation now accounting for 53% of the online poker market. WSOP/888 also fell by 10.81% to $1,027,161, good for a 45% market share; while Ultimate Poker slid 18.32% to $40,230 for May, representing a mere 1.77% of NJ’s online poker industry.

Not all bad news

It wasn’t all bad news for New Jersey, though, as the state’s 11 brick-and-mortar casinos generated $232.3 million last month, an improvement of 1.3% compared to the same month last year. This figures, however, does not include the now closed Atlantic Club casino, without which NJ’s gambling market would have declined by 8.2%. Online gambling revenues were also not included in the result. In total, casino table games were down by 22% to $56.2 million, while slot machine revenues rose by 5% to $176.2 million in May.

Overall, four of the state’s casinos reported increased revenues for May, with The Golden Nugget posting the biggest monthly growth, up 70% to $16.3 million; followed by The Tropicana up 20% to $25.1 million; Borgata Hotel Casino up 4.8% to $55 million; and Revel up 4.2% to $11.6 million.

On the flip side, Trump Plaza was the weakest performer, winning just $5.2 million in May, a 25% decline year-over-year.

In addition, NJ casinos apparently would have reported even bigger gains in May had its customers not enjoyed a particularly lucky month. As Matt Levinson, chairman of the New Jersey Casino Control Commission, explains:

“The amount of money changed into chips at the tables, which is the drop, was up 0.4 percent in May, and that’s a very positive sign and an indicator of increased gaming activity. We all know how fickle Lady Luck can be, and last month she favored the players a lot more and the casinos won a lot less at the tables.”