NJ iGaming Protecting Land Casino Revenues From Severe Weather

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Monday, March 19th, 2018 | Written by Stephen Smith

New Jersey’s land based casinos have suffered a chilly start to 2018, with revenues falling in both January and February as cold weather and blizzards interfere with their customers’ desire to brave the elements and take a road trip to the various venues. As James Plousis, chairman of the New Jersey Casino Control Commission, commented at the beginning of February:

“What a difference a blizzard makes. When people are stuck in their homes by more than a foot of snow and temperatures are dipping into single digits, they don’t come to Atlantic City. So, it comes as no surprise that casino revenues were down last month.”

On the plus side, however, it would appear more state residents chose to gamble online from the comfort of their own homes, instead, resulting in overall gambling revenues declining by 9.9% and 6.5% in January and February respectively, instead of by 12.6% and 8.9% if New Jersey’s online gambling results were excluded from the figures.

Benefits of Online Gambling

The Garden State’s casino industry saw its business decline steadily from 2006 to 2015 until hitting revenues of $2.6 billion in 2016, marking its first return to growth (+1.5%) in a decade. The introduction of online gambling in 2013, with the industry subsequently becoming more efficient over the ensuing years, is widely accepted as the main reason Atlantic City succeeded in freeing itself from the previous downward trend.

Needless to say, initial concerns over the possibility of online gambling cannibalizing land based revenues has proven quite unfounded, and furthermore the industry is now seen as extremely beneficial on a number of different fronts, including helping casinos to connect with new customers, reconnect with lapsed customers, and by generally
increasing visits and spending by its existing customers.

Bringing Casinos to Customers

The storms which have battered New Jersey over the past couple of months and are expected to continue into March have also revealed yet another benefit derived from internet gambling, namely the ability to bring the casino to customers during times of extreme weather.

In fact, an inverse correlation is now apparent between online gambling and land based revenues at such times, and as businesses were forced to shut during the blizzards, gamblers simply signed onto their online accounts and gambled from their own homes, instead. Furthermore, online gambling hit a new record of $21.96 million in January, which was then broken again in February with $21.99 million in revenue, despite it being the shortest month on the calendar.

Lesson for Northeast States

Just as US states will carefully be watching how the online poker liquidity deal agreed between New Jersey, Nevada and Delaware pans out when it is eventually enacted, so will Northeast states in the US now also be taking note of the potential the industry has to offer in softening the revenue blow to its casinos from cold and snowy weather.

The casino industries of Massachusetts, Rhode Island, New York, and Connecticut, for instance, are even more susceptible to the influence of winter storms than New Jersey, with just one storm often enough to obliterate their casino revenues for the month, or in more extreme cases for the year. Case in point, the storms which New Jersey suffered in January and February are thought to have cost Atlantic City casinos around $40 million in lost revenues, while Massachusetts, too, experienced three major blizzards over the space of just two weeks, meaning no one wanted to take the risk of going outside if it could be avoided, let alone travel treacherous routes in order to reach a casino and gamble.

In the meantime, more storms are expected for the week ahead, this time delivering a mixture of snow and rain in the New Jersey region, according to the National Weather Service. Despite spring fast approaching, it appears that Old Man Winter isn’t quite finished with the Northeast area just yet, and as mentioned last week in nbcnewyork.com:

“The potential fourth significant winter storm comes on the heels of a trio of deadly nor’easters that ravaged parts of the tri-state this month, knocking out power to hundreds of thousands of people and crippling East Coast travel.”

In other words, internet gambling is fast being recognized as a valuable tool by which casinos based in the country’s colder regions can protect their businesses from a loss of earnings. It does this by allowing casinos to bring their products to the customers during periods of extreme winter weather rather than vice versa, although it does, of course, require the state’s power to stay up and running at such times.