Golden Nugget SportsBook

Gamblers check out the SportsBook at Golden Nugget Atlantic City. Sports betting could generate billions for the National Football League, according to a recent report.

The imminent launch of sports betting in Pennsylvania will undoubtedly affect Atlantic City’s casinos, but experts believe any losses will be minimal.

Michael Pollock, managing director of Spectrum Gaming Group, a consulting and research firm, said the prospects of sports betting elsewhere was always a question of when, not if.

“Pennsylvania, particularly eastern Pennsylvania, represents an important market for Atlantic City,” Pollock said. “But I don’t think it will have a material impact on visitation (to the resort).”

Since launching in mid-June, legalized sports betting at New Jersey’s racetracks and casinos has generated almost $16.4 million in revenue. In the two full months — July and August — that sports betting has been legal in the Garden State, more than $136 million has been wagered.

The American Gaming Association estimates that the sports betting industry could generate more than 150,000 new jobs and yearly revenue of more than $25 billion in the United States.

The AGA estimates the tax revenue generated by the nationwide industry could be as much as $5.3 billion nationwide.

Sports betting is already technically legal in the Keystone State and five properties — Hollywood Casino at Penn National Race Course, Parx Casino and Racing, Harrah’s Philadelphia, SugarHouse Casino and Rivers Casino — have submitted applications to the Gaming Control Board to offer the amenity.

Since the U.S. Supreme Court overturned a federal ban on sports betting outside of Nevada in May, four states — Delaware, New Jersey, Mississippi and West Virginia — have launched sports betting operations. Most industry experts say that sports betting will be live at no less than one Pennsylvania casino by the end of the fall, if not sooner. The reason for the delay, thus far, has been the state’s current regulations which call for a $10 million licensing fee and a 36 percent tax rate.

By comparison, New Jersey only charges $100,000 for a sports betting license while the tax rate at land-based casinos is 8.5 percent and 13 percent online.

The high cost of opening a sports betting operation has already given providers a cause for concern.

William Hill CEO Joe Asher, whose company currently operates two sports betting parlors in New Jersey at Monmouth Park Racetrack and Ocean Resort Casino with plans for a third at Tropicana Atlantic City, has publicly said the high tax rate makes the Pennsylvania market less attractive.

Nonetheless, experts agree the tax rate will not keep sports betting from eventually coming to Pennsylvania’s casinos.

Steve Norton, a former Atlantic City casino executive and industry consultant, said that while profit margins for Pennsylvania casinos may be smaller, the properties will ultimately compete with Atlantic City because of convenience for customers.

“Atlantic City stands to lose their Philadelphia sports betting customers, which will affect sports betting revenues, casino win and other revenues, primarily food and beverage,” Norton said. “And Atlantic City could also lose a lot of South Jersey play, as a meaningful percent of South Jersey residents are closer to casinos in Pennsylvania and Delaware.”

Norton, who was an important figure in bringing casino gaming to New Jersey in 1978, said the launch of online and mobile sports betting may do more harm to brick-and-motor casinos in Atlantic City than competition from neighboring states.

“I still believe that New Jersey should stop making sports betting available online, which removes a reason to visit a live casino or race track,” he said. “Sports betting should have created a reason to visit a casino, but online gaming removed that need.”

Dustin Gouker, lead sports betting analyst for PlayNJ.com, said land-based casinos can actually benefit from online sports betting by creating a lasting relationship with the customer.

“By making sure you have a really good online product, you can connect the customer to your brand,” he said.

Rummy Pandit, executive director at the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University, agreed with that premise.

“Atlantic City has a sizable market that is incorporated within loyalty programs,” he said. “Customers earn rewards which are scaled to increase with play, hence they will tend to continue growing their loyalty portfolio and utilizing their rewards at the current venue rather than starting over. Ultimately, relationships frequently drive visitation decisions.”

Because of the head start Atlantic City casinos have in operating sports books, coupled with its properties’ strong rewards and player loyalty programs, the resort is “going to be just fine,” Pollock said.

“It’s going to hurt a little bit,” Gouker said. “But I’m not sure it’s the end of days for Atlantic City.”

Contact: 609-272-7222 ddanzis@pressofac.com Twitter @ACPressDanzis

Staff Writer

I cover Atlantic City government and the casino industry since joining The Press in early 2018. I formerly worked as a politics & government reporter for NJ Herald and received the First Amendment: Art Weissman Memorial NJPA Award two years in a row.

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