New Jersey’s Internet gambling industry brought in $9.5 million in January, exceeding December’s revenue tally by nearly $2 million.
The total marks a 28 percent increase over the December revenue and helps offset a 9 percent loss in land-based gaming. Still, it appears to leave the state far from Gov. Chris Christie’s predictions of $1 billion in online gambling revenue by the end of the fiscal year.
Analysts and casino interests attributed the gains largely to increased marketing campaigns seeking to attract new gamblers. In most cases, those campaigns didn’t kick into full swing until early January.
That was the case for Caesars Interactive Entertainment, which saw a 49 percent online revenue increase over the $2 million the company earned in December. Caesars Interactive holds Internet gambling permits for both the Caesars and Bally’s properties in Atlantic City.
“There was just no way for us to really be out there in a big way with this product until early January,” said Seth Palansky, a spokesman for Caesars Interactive. “We think there’s a lot of growth ahead. Ultimately, we’ll be concerned about how we keep our share of the market. We believe the pie is going to get even bigger.”
California-based gambling research firm Eilers Research also believes the pie will get bigger but characterized January’s results as slightly disappointing. The firm estimated that between $10 million and $12 million would have been more in line with expectations.
Adam Krejcik, managing director at Eilers Research, said revenue will have to pick up by the second half of the year for the state to meet Eilers’ predictions that New Jersey will see between $170 million and $200 million in online revenue this year. The firm’s predictions are among the most conservative estimates made for the projected value of the state’s industry.
Krejcik attributed more generous projections by other firms in part to analysis based on European markets, which include online sports betting. Eilers’ projections are adjusted to account for New Jersey’s market, where sports betting is not allowed.
Meanwhile, he noted positive results for some casinos. Online poker accounted for about $4.3 million of January’s online revenue. That market share was taken almost entirely by Caesars Interactive and Borgata Hotel Casino & Spa, which accounted for nearly 97 percent of online poker revenue.
“There doesn’t seem to be anyone who is going to threaten them,” Krejcik said. “The total user base for poker isn’t increasing that much. Most of the growth is going to have to come from the casino side.”
Borgata Senior Vice President Joe Lupo said the casino is pleased with its results. Borgata continued as the market leader with $3.9 million, or 40 percent of the state’s total online revenue.
“I think the poker market was probably more savvy and understanding about New Jersey coming online and therefore ramped up quicker, but there’s definitely still an opportunity for growth there,” Lupo said. “The biggest opportunity from a growth standpoint is mobile applications.”
Borgata launched a mobile gambling app for iPhone and iPads in January and has plans for an upcoming Android version, he said.
State Sen. Jim Whelan, D-Atlantic, who with a number of others has been critical of the state’s projections, called January’s increases significant but said the state still has a long way to go.
“The projections were unrealistic in my judgment and the judgment of just about anyone I spoke to,” Whelan said. “Obviously these increases won’t continue indefinitely. We can just hope that the growth pattern continues for some time.”
New Jersey launched online gambling in November as the state sought to offset losses seen in Atlantic City’s brick-and-mortar casino industry. Online gambling companies must team with an Atlantic City casino to operate in the state.
The state saw $186 million in casino revenue in January, down 9 percent from $205 million in January 2013. When Internet gambling revenue is added to casino revenue in January, the industry’s losses are offset to about 5 percent over January 2013 levels.
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