March, Q1 numbers show bright spots for NJ gaming

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Jane Bokunewicz, faculty director of the Lloyd D. Levenson Institute of Gaming, Hospitality, and Tourism (LIGHT), Stockton University School of Business, described New Jersey’s First Quarter gross gaming revenue for 2023 as offering “a ray of sunshine following a disappointing year-end 2022 report.”

In March, casinos won $228.6 million, a 5.6% increase versus the same month in 2022 ($216.6 million). For the quarter, that figure – a key metric because it reflects brick-and-mortar casino activity – was $655.3 million, 7% higher than the same period last year ($612.7 million). That quarterly number was also 9.7% higher than 2019’s pre-pandemic figures ($597.1 million)

Bokunewicz’s assessment followed her analysis of an April 14 Division of Gaming Enforcement report that included numbers for March and the first quarter of 2023. Last week, NJBIZ reported on the 2022 year-end report referenced by the scholar, which showed revenue up but profits down as casino operators dealt with a number of challenges including inflation, higher labor costs and the continued increase in competition from surrounding states.

Total gaming revenue in March, reported by casinos, racetracks and their partners was $487.4 million, a 15% increase from March 2022 ($423.7 million). First-quarter revenue was $1.34 billion, a 13.4% increase from 2022’s first-quarter figure of $1.18 billion.

Internet gaming continued its forward momentum with a March win reported by casinos and their partners of $165.7 million—a 17.8% jump from last March ($140.7 million). The year-to-date internet gaming win was $461.2 million, a 12.9% versus the last year’s first quarter ($408.5 million).

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And perhaps the most notable and encouraging part of the report came via sports betting, which saw a strong March following a uneven last few months. The total sports betting handle was $1.03 billion, which was still down 8.5% from last March ($1.12 billion), but with gross revenue of $93 million reported by casinos, racetracks and their partners, marked a 40.1% increase over the same month the year prior ($66.4 million). The year-to-date sports wagering gross revenue was $220 million, a 39.7% increase over last year’s first quarter.

“When revenues from internet and sports wagering are included, Atlantic City operators’ collective performance in the first quarter of 2023 ($1.2 billion) exceeded 2022 ($1.08 billion) by 11.5% and pre-pandemic 2019 ($726.7 million) by 65.7%,” said Bokunewicz. “The rise of internet gaming especially during the pandemic has clearly accelerated total gross gaming revenue for Atlantic City’s casinos operators to new heights masking more modest gains in brick-and-mortar revenue in the same period. Sports betting, perhaps fueled by March Madness, recorded an impressive 49.3% increase year-over-year revenue in the three months ended March 2023 compared to the same period in 2022. The increase is even more impressive when compared to first quarter 2019, as the market was just beginning to take off. The first quarter of 2023 saw $87.5 million in revenue compared to $25 million in the same period of 2019.”

“In March, Atlantic City’s total gaming revenue grew more than 15% compared to the same month last year, bolstered by wagering during the ‘March Madness’ basketball tournament,” said New Jersey Casino Control Commission Chairman James Plousis in response to the March report. “Without a doubt, Atlantic City has worked hard to successfully package sports wagering and traditional casino gaming to create complimentary experiences for visitors. Casino win reached its highest level for the month of March in 10 years, showing that Atlantic City’s visitors are taking advantage of its many diverse offerings.”

Without a doubt, Atlantic City has worked hard to successfully package sports wagering and traditional casino gaming to create complimentary experiences for visitors.
– James Plousis, chairman, New Jersey Casino Control Commission

“As promised, March Madness brought a touch of relief from February’s backslide, as New Jersey’s sportsbooks collected 21% more in handle this month than they did in February. However, wagers have decreased year-over-year, with an 8.5% decrease from March 2022. What this long-term decrease could mean remains to be seen, but New Jersey is not the sole market experiencing this,” said Dru James, who analyzed the report for TopNJCasinos.com. “Although the gains in wagers were modest, revenue rose sharply this month, as sportsbooks generated just over $93 million in March. This is the third-highest month for revenue on record, coming behind November 2021’s $114.79 million figure and September 2022’s $97.89 million.”

James expects sports wagers to steadily decrease the next few months, which is typical, as betting options are slim into the spring and summer.

“So it will be the time for New Jersey’s casinos to shine,” said James. “The figures will jump back up in September when the NFL season begins again.”

Overall, and in a nod to that year-end report, Bokunewicz stresses that we must wait to see if the gains in gross revenue will translate into strong net revenue performance and gross operating profits when the full first quarter 2023 data is released next month.

“It will be critical to see if the operators’ hard won gross revenue gains will be able to keep up with the increasing cost of doing business,” she explained. “With the threat of New York City’s casinos looming, Atlantic City’s casino operators are meeting the challenge of offering a distinctive gaming product and integrated resort experience with enticing new and updated offerings for summer 2023. The state and city may have the most to gain as new and refreshed offerings call consumers back to the resort and increasing internet and sports wagering revenues generate record gaming-tax contributions.”

NJBIZ has reported extensively on the non-gaming redevelopment throughout Atlantic City. In his remarks, Plousis cited the exciting progress being made.

“This is an example of how Atlantic City’s operators have smartly invested capital to add exciting new attractions and appealing accommodations,” said Plousis. “Just last week, I visited several casino hotels and previewed improvements that are underway. New high-quality in-person experiences will surely be well-received and help make the summer season very positive for Atlantic City and its guests.”