New Jersey’s Smaller Brands the Catalyst Behind iPoker Revival

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Tuesday, June 6th, 2017 | Written by Shane Larson

After a decade of operating in the red, Atlantic City’s casinos finally returned to growth last year, with revenues higher by 1.5 percent at $2.602 billion in 2016, compared to the $2.563 billion collected in 2015. Nevertheless, those revenues derived from the state’s land-based casino operations actually declined by 0.3 percent in 2016 to $2.406 billion, with internet gambling up by 32 percent to $197 million accounting for much of the long awaited turnaround in Atlantic City’s fortunes.

Furthermore, a close look at the numbers show that it’s not the larger, well-established casino brands that are driving AC’s resurgence. Instead, it is the smaller casinos that are outperforming their larger neighbors, and are chiefly responsible for helping to drive the industry in the East Coast gambling destination. They also happen to be the most adaptable and quickest operators to respond on the New Jersey internet casino front.

Aggressive Competitors

The Borgata and Caesars may be the most recognizable of the casinos in Atlantic City, but smaller venues such as Resorts, the Golden Nugget and Tropicana are proving to be the most aggressive competitors near the boardwalk. Case in point, since 2014 all three casinos have seen huge average month-over-month increases in their gross gaming revenue, with Resorts having enjoyed an average monthly growth of 44.25 percent, the Golden Nugget an average land-based gross gaming revenue increases of 41.38 percent, and the Tropicana a average monthly revenue growth of 39.63 percent. Compare those numbers to Borgata’s 18.05 percent and Caesars 4.77 percent average monthly growth and it’s clear which casinos are booming.

Even when you look at the actual total dollar increases, the casinos are faring well. Thus far in 2017, Tropicana has been growing by leaps and bounds, with the tiny casino averaging revenues at just $400,000 below Harrahs, putting the property on pace to shift from second-tier status into the top tier category alongside the big brand name casinos. So what are the small casinos doing to dominate the market?

Major Spenders

Quite simply, all three casinos are spending money. It’s a long-held law in business that to make money, companies need to spend it, and Tropicana, the Golden Nugget and Resorts are proof that this concept works. Tropicana has invested more than $90 million in renovations to improve its hotel rooms, add retail stores, nightclubs, and introduce a new slot area with high limits machines to its casino floor. Resorts has also spent $70 million on building a Margaritaville complex with dining and retail shops, before then investing a further $20 million in a major overhaul of its hotel rooms. Meanwhile,Landrys, the parent company of the Golden Nugget, invested $150 million in order to reinvent the Trump Marina.

Online Growth

The small casinos aren’t just winning on their gaming floors, either, with all three casinos also doing very well online. In fact, the three properties boast the most profitable online gambling sites in New Jersey, and compared to 2014’s online gross gaming revenue numbers, Tropicana has enjoyed a 45.9 percent total increase. In addition, Resorts and Golden Nugget have both boosted online gross gaming revenue by more than 78 percent since 2014.

It’s clear that online and offline gambling operations go hand in hand when you examine the numbers. While the major brand casinos have enjoyed an advantage in being able to attract players first to their iGaming sites, small brands have managed to grow their online revenues by building their brick-and-mortar brands. Increases in revenue online can be used to improve the casino resorts, which only further enhance the brands’ reputation of drawing in more and more offline and online players.

Responsible Gambling

New Jersey launched its online gambling industry back in 2013, and despite initial concerns from some groups that it may contribute to an increase in the number of problem gamblers in the state, no such statistics have been noted. In fact, a recent study conducted by Rutgers University’s Center for Gambling Studies at the School of Social Work found that just 7 percent of the 3,600 adults surveyed had gambled online, with the study concluding that internet gambling on its own does not make it more likely for an individual to develop a gambling addiction.