Hailed by Governor Chris Cristie as the way out of the duldrums for Atlantic City casinos, revenues from New Jersey's licensed online casinos are falling well short of expectations.
The expectation (from lawmakers anyway) back when new onlne gambling laws were being debated, was that New Jersey online casinos would bring in an extra $150 million in their first year of operations, rising considerably thereafter. One year on, that expectation has proven to be an overly optimistic one.
Fitch Rating service has put the actual revenue number at 45% below the $150 million that was hoped. Not enough to help save an industry that has seen overall revenues tumble 55% since peaks in 2006. And prospects for future growth in online appear grim, as suggested by a spokesperson from Fitch:
“However, with online gaming revenues plateauing early in the ramp-up cycle, online prospects are now depressed and unprofitable land-based operations are discovering that closing is their best option"
There is also contention from some quarters that rather than helping the situation, online play is simply providing gaming option that is cannibalising foot traffic throught the doors of Atlantic City's casinos. Online players contributes gambling revenue only, while traditional players contribute non-gaming revenues (accomodation, entertainment etc) as well.
On the Las Vegas Strip, non-gaming revenue comprises over 60% of total revenues - keeping the casinos afloat in these tough times. Atlantic City has neglected this area. Add increased competition from other regional casinos and the prognosis is pretty dire.
Here's a very gloomy snapshot:
Atlantic City casinos are at: begain 2014 with 12 casinos. The Atlantic Club closed in January; Caesars will close the Showboat on August 31; Trump Plaza is sceduled to close in September; Owners of the The Revel say it will close if a buyer can't be found soon.