Casino revenue evaporates during first full month of COVID-19 closures

Daniel J. Munoz//May 14, 2020//

Casino revenue evaporates during first full month of COVID-19 closures

Daniel J. Munoz//May 14, 2020//

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Revenue at New Jersey’s casinos cratered during April, the first full month that all nine establishments remained closed as part of a COVID-19 statewide shutdown, with some seeing drops of close to 100 percent.

That is according to Wednesday evening data from the state’s Division of Gaming Enforcement, which regulates the state’s nine brick and mortar establishments, its racetracks and roughly two-dozen online casinos. Total gaming revenue, that is, how much the house took home, was $82.6 million this April, compared to $265.4 million in 2019 – or a 68.9 percent drop.

The silver lining was internet gaming win – patrons took home nearly $80 million last month from online wagers, compared to $36.5 million in April 2019, or a 118.6 percent increase.

“Although it may be some time until sports resume with live audiences, if Major League Baseball plays this summer, even to empty stadiums, it will give sports bettors something on which to wager,” said Jane Bokunewicz, who heads Stockton University’s Lloyd D. Levenson Institute for Gaming, Hospitality and Tourism.

For over a year, New Jersey’s sports betting market was seeing month over month record-breaking in its total sports handle, until April.

Patrons only bet $55 million online, and as the DGE notes, most global sporting events have been cancelled. With casinos and racetracks closed and not accepting in-person bets, brick and mortar sports wagering establishments made $0 in April.

Ocean Resort Casino, the tallest building in Atlantic City.
Ocean Resort Casino, the tallest building in Atlantic City. – AARON HOUSTON

The state’s casinos, all based in Atlantic City, have been closed since March 16 under an order from Gov. Phil Murphy in an effort to stop the spread of the respiratory illness. And the loss of tourists, visitors and commerce has sent shockwaves through the ancillary economy in Atlantic City – hotels, restaurants, bars and the boardwalk. With continuing drops in revenue, thousands of casino and hospitality workers have been laid off.

In February, the last full month the casinos stayed open, patrons wagered $58 million at on-site sportsbooks and $436 million via online and mobile apps.

During that month, the casinos took home a combined $287.3 million, according to DGE data.

“Seeing New Jersey’s retail sportsbook handle at zero and its land-based casinos generate no revenue is jarring,” said Dustin Gouker, an analyst at the gaming industry publication PlayNJ.com.

“The jump in revenue from online casino and poker is welcome, but there is no way yet for it to fully make up for the revenue lost by Atlantic City’s casinos and sportsbooks.”

Bally’s Atlantic City Hotel and Casino saw a 99.9 percent loss of gaming win: $14.5 million in April 2019, compared to $20,095 this year.

The gleaming Ocean Casino Resort, which opened in June 2018 and towers over the Atlantic Ocean, saw a 92.5 percent drop in its April win: $16.3 million in 2019 compared to $1.2 million this year.

Hard Rock Hotel and Casino Atlantic City, which opened the same time as Ocean, saw an 81.9 percent drop in winnings: $25 million last year compared to $4.5 million this past month.

Tropicana Atlantic City saw its revenue down by 78.5 percent, taking home $27.8 million in 2019 compared to $5.9 million this year.

In the near future, lawmakers are hoping to throw a lifeline to the casinos to to keep them from sinking, and to that end introduced legislation creating tax breaks and zero-interest loans.

The financial aid would be contingent on the casinos using the money to rehire and employ former workers, market Atlantic City to tourists, and anything else that would help with the “return of pre-emergency economic, gaming and tourism levels” in the city.