Will Legal NJ Sports Betting Help Atlantic City Casino Revenue? Only Time Will Tell

In what was a landmark week for Atlantic City, New Jersey, and the rest of the country, the US Supreme Court effectively nullified the nation’s sports betting ban.

And the change put one question we’ve been wanting to know in the spotlight: What kind of effect will this have on AC casino revenue?

The answer to that question may be one we know very soon.

General consensus: It’s going to help

There’s nothing revolutionary in the thought that NJ sports betting will help Atlantic City casinos.

Local leaders are unanimous in that sentiment, according to a recent article from NJ.com. Assemblyman Ralph Caputo and former state Sen. Raymond Lesniak both were quoted as saying increased visitor traffic and, as a result, increased hospitality revenue, are inevitable.

And while restaurants, hotels and other local businesses will see a spike, casino revenue is the big question.

In 2017, Nevada earned a quarter of a billion dollars in revenue, most of which came from Las Vegas and the city’s roughly 4.5 percent win from handle.

Geography may influence the scale of sports betting

Las Vegas, however, has a distinct advantage over Atlantic City in that it has geographical superiority. For example, Atlantic City casinos are about an hour drive on a Saturday from Philadelphia and around three hours from New York.

Philadelphia is the site of three of Pennsylvania’s five top revenue earners: Harrah’s, SugarHouse, and Parx. The state’s gambling expansion law has a loose framework for sports betting, an indication that, should these three casinos open sportsbooks, AC casinos will face some serious competition.

A one- to three-hour drive in Las Vegas, however, puts you either in the desert or in St. George, UT, which is nearly a two-hour drive. Utah is a conservative state, and it’s no guarantee that they’ll allow sports betting.

In this sense, Las Vegas is a somewhat poor comparison when it comes to the revenue NJ casinos could bring in from sports betting; competition is thin and the city has decades of experience in refining and regulating its market.

While Las Vegas certainly has its competitive and experience-based advantages over Atlantic City, the East Coast gambling king will most likely lead the way in regional sports betting in terms of regulating, scaling, and refining.

Former casino executive and consultant Bob Ambrose noted in an interview with us that he believes the New Jersey Division of Gaming Enforcement (DGE) is more than capable of forming the necessary regulations to help NJ sports betting succeed.

He also noted what is perhaps the greatest advantage that Atlantic City has over Pennsylvania’s network of casinos: low taxes. PA lawmakers have a proposed 36-percent tax on sports betting revenue on the books, whereas New Jersey would tax land-based revenue at 8 percent and mobile at 12.5 percent in a recent bill.

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NJ sports betting could come at just the right time

Spring brought good news for Atlantic City as the DGE announced casinos had year-on-year growth in April. This marked the first time in 2018 that Atlantic City casinos posted such a gain.

The state faced historic bad weather the first quarter of the year. NJ online gambling did well but overall casino win was down January-March.

As the city closes in on the June opening of Hard Rock Atlantic City and Ocean Resort Casino, there’s a good chance those year-on-year gains will continue.

Should NJ sports betting launch in the next month as planned, those numbers, it stands to reason, will be turbocharged.

About the Author

J.R. Duren

A three-time winner of the Florida Press Club Excellence in Journalism contest, J.R. Duren works as a freelance writer with a focus on the NJ online gambling and online casino industry. He writes for a number of publications, including Bespoke Post, Our Amazing Norway, Barcelona Metropolitan, Snooth, and the Villages Daily Sun.