ATLANTIC CITY — Gaming revenue in the resort’s casinos was up 20 percent in November compared to last year, according to state gaming regulators.
Figures released Wednesday by the state Division of Gaming Enforcement show total gaming revenue increased from $206.4 million in November 2017 to $247.65 million last month. In 2017, only seven casinos were operational in Atlantic City. There are now nine casino hotel properties in the city.
Some warn the increased revenues are a result of an increase in the number of properties and the addition of sports betting rather than the growth of the industry.
“November was another strong month for the casino industry,” said James Plousis, chairman of the Casino Control Commission. “The stage is set for 2018 to be the third straight year of growth in Atlantic City.”
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Year-to-date total gaming revenue was up 6.5 percent in Atlantic City compared to the same 11-month period last year. Through November, the casino industry reported $2.6 billion in total gaming revenue. Last year’s reported revenue during the same timeframe was $2.45 billion.
In 2016, total gaming revenue for the entire industry grew 1.5 percent despite the fact that Trump Taj Mahal Casino Resort closed in October. Last year, the Atlantic City casino industry reported an increase in revenue of 2.2 percent from the prior year.
Rummy Pandit, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University, said he expected an increase in gaming revenue last month but was “pleasantly surprised” by the actual amount of growth.
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Since June, the Atlantic City casino industry has had the added benefit of two new properties — Hard Rock Hotel & Casino and Ocean Resort Casino — and the introduction of sports betting.
“There’s new market segments coming into the city,” Pandit said, explaining why the revenue increase was anticipated. “There could be some novelty (related to the new openings and sports betting), but I don’t necessarily believe it will taper off. The market is going to continue to grow because we’re offering a destination resort.”
November is the sixth consecutive month of gaming revenue growth in Atlantic City and the seventh month in 2018. However, gross operating profits in the industry were down 9.3 percent through September for the year compared to 2017, signaling to some experts that the market may not be able to handle nine casinos.
Tony Marino, a local analyst, said 2018 has produced positive results for the resort but suggested it “might be wise to curb our enthusiasm about the long-term continuation of positive current casino trends.” He said overall revenue and visitation numbers will likely increase on a monthly basis until about July 2019.
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“But between now and then, the current four-month negative revenue trends among most of the seven (pre-Hard Rock and ORC) operators will also likely continue until next summer and perhaps beyond,” Marino said. “In other words, the hoped-for expansion of Atlantic City’s tourist market demand will continue to lag considerably behind the expansion in casino supply triggered by the two new casinos. ... If Atlantic City’s past history has taught us to be realistic, we should anticipate that total year-round demand may not be sufficient to keep all nine casinos profitable by 2020 and beyond.”
Internet gaming and sports betting revenue accounted for $38.5 million of November’s reported figure. Internet gaming revenue increased 30.7 percent compared to the same month last year, netting online casino operators $26.9 million.
Sports betting revenue was a reported $11.5 million last month in Atlantic City, with operators statewide taking in more than $330 million in wagers. Since being launched in mid-June, sports betting has generated $40.8 million in Atlantic City and $73.2 million statewide, with more than $928 million in wagers placed.
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“New Jersey continues its march toward becoming the nation’s largest legal sports betting market,” said Dustin Gouker, lead sports betting analyst for PlayNJ.com. “The main driver is online sports betting, which now accounts for the vast majority of all bets in New Jersey. The state’s embrace of mobile betting has shown the path forward for any other state planning on legalizing and regulating sports betting.”
The amount the casino properties pay in lieu of taxes, or PILOT payments, is based on annual gaming revenue. The casinos paid $130 million in lieu of taxes in 2018 based on the previous year’s total gaming revenue. At $3 billion in annual gaming revenue, the PILOT payment would increase to $150 million.
While eclipsing the $3 billion mark for the year is unlikely, Pandit said he “absolutely” expects the industry to surpass that amount in 2019.