Las Vegas aside, Atlantic City is America’s best-known gambling hot spot. The city, located in New Jersey, is home to nine incredible casinos operated by some of the biggest names in the industry—almost all of which also have online counterparts.
Unlike many other US states, New Jersey allows operators to provide their services to players legally. However, since the implementation of these online versions of the casinos, there has been rife competition between them and physical options.
Below, we’ll look at how each option is faring in the region and answer whether online casinos are killing those that Atlantic City is famous for.
Physical Casinos
With gambling levels in Atlantic City still not back to post-pandemic levels, casinos are trying their hardest to attract players and boost their earning potential. Despite these efforts, the industry has been hard hit, particularly in 2023.
According to reports from the New Jersey Division of Gaming Enforcement (DGE), profits from the nine casinos operating in the city in 2023 were 1.6% lower than that of 2022. The casinos turned a gross operating profit of just $744.7 million.
Resorts Casino Hotel was the hardest hit by this downturn, suffering a 54.8% decline in operating profit compared to the previous year. On the other hand, Bally’s recorded an increase from a loss in 2022 to a profit of $11.1 million in 2023.
Despite the good news for Bally’s, the nine casinos battled overall, with only four posting revenue growth. The remaining five all suffered lower revenues. Hard Rock experienced the most significant drop, posting a total net revenue of $572.7 million—4.3% lower than in 2022.
On the upside, however, all nine physical casinos remain profitable and have, so far, avoided operating at a loss.
Online Casinos and Gambling
While physical casinos are battling to break previous revenue levels, the same cannot be said for operators in the iGaming sector. This includes online casinos (which comprise those operated by physical counterparts) and sports books.
In 2023, total gambling activities in New Jersey broke records and reached almost $5.8 billion, an 11% increase from 2022. However, more than half of this comes from iGaming activities—not the physical casinos and bookmakers located at horse racing tracks in the region.
While 2023 proved to be an excellent year for operators in the iGaming sector in terms of revenue, profits didn’t reflect this. The primary reason for this is that the profits made by online operators do not belong solely to those operators.
Instead, these profits need to be shared among multiple stakeholders, such as tech companies, service providers, and other suppliers who contribute to the smooth running of these sites. This is in contrast to physical casinos, which get to keep their profits.
Are Online Casinos Killing Atlantic City?
Looking at 2023 figures, it would appear that online gambling options are killing the business of physical casinos in Atlantic City. This trend can be attributed to players seeking greater convenience or better deals and promotions like those found if you use this link.
However, when looking at revenue from the first quarter of 2024, declaring a time of death for AC casinos may be premature.
In March, New Jersey broke records by posting a total gambling revenue of $526.6 million—increasing 14.1% from the month before. This figure includes revenue generated by the region’s physical and online casinos and bookmakers.
Land-based gambling options accounted for $239.8 million, a yearly increase of 4.9% for the embattled casinos. Most of this revenue was generated by slot machines, with table games and other gambling options accounting for just $67 million.
During the same month, online casinos recorded only $197.2 million in revenue. This represents a 19.9% increase from the same month in 2023 and shows that iGaming is rising among many players.
Like physical options, slots were primarily responsible for this $197.2 million, accounting for $194.8 million. However, when sports betting statistics are added to the mix, this increase in revenue stops.
In March 2024, sports betting among NJ players dropped 3.6% compared to the previous year, down to $89.7 million. Regarding handle (the total amount of money wagered), sports betting received $1.33 billion across the month, showing solid year-on-year growth despite a drop from 2023.
Contributing Factors
Based on the figures above, both physical and online gambling options seem to be in a yo-yo motion—changing from profit rises to falls later on. Despite this bouncy ride, both sectors are experiencing prolonged growth year-on-year.
With New Jersey almost consistently breaking records when it comes to how much people are gambling, this doesn’t seem likely to change. However, many contributing factors could affect this.
Recently, the cost of living has increased, leading consumers to reconsider where their disposable income is going. With high interest rates on borrowing, fuel prices rising, and the housing market becoming almost impossible to enter, entertainment (under which gambling falls) is being restricted by the budgets of everyday households.
This, alongside a constantly evolving legal framework and opinion surrounding the pastime, could quickly change the activity’s growth path. However, the saving grace for online and physical gambling operators in Atlantic City is the forward-thinking view of the activity that New Jersey has held for several years.
Conclusion
All evidence suggests that online casinos are far from spelling the end of Atlantic City. It remains one of the premier gambling hubs in the country, with millions of players visiting the city’s nine casinos each year.
Instead of a showdown between online and physical options, the two are working seamlessly alongside each other. Both are contributing to the overall gambling industry of the state, and it seems like gamblers in the region can look forward to a future full of exceptional gambling opportunities—in physical venues and online.
