The casinos of Atlantic City are now into their third month of being closed due to the COVID-19 pandemic.
And the fiscal impact of being shut down is starting to rear its ugly head.
According to the last three monthly comparisons released by the Division of Gaming Enforcement, the nine Atlantic City casinos have made a combined $85.5 million in land-based revenue.
To put that into context, Borgata, the top-performing AC casino, posted $59.4 million in revenue in March 2019.
The loss of revenue has not only had an effect on the casinos but also on Atlantic City and the state as a whole.
The end result of such a prolonged casino closure is a decreased amount in taxes collected from casino revenues. Those taxes help fund various local and state projects.
Revenue, taxes at a standstill with AC casinos closed
To be fair, 2020 started off on a high note for casinos. Atlantic City casino revenue was enjoying a 21-month win streak.
So, it is no surprise that with no in-person bets and lights out, revenue for the state’s nine casinos has deteriorated.
In March through May of last year, casino win totaled $653.7 million.
In comparison, the casinos were open for just 16 days in March before temporarily closing. The result is that for March-May 2020, revenue had an 86% year-over-year drop.
Meanwhile, during March through May of last year, the state pulled in $47.9 million in taxes from casino revenue. (That number includes retail sports betting but excludes internet gaming tax, which did not shut down.)
During the same time period in 2020, the state collected only S6.1 million.
The drop almost certainly leaves a budget gap in New Jersey.
NJ online casinos pick up the pace
The one saving grace for the closed casinos in NJ during these trying times has been the growing number of people gambling online.
In the last three months, NJ online casinos earned $230.3 million, more than double the same time last year.
As a whole, that industry has yet to see a month-over-month decline in any year since its launch.
Posting three record-setting months in a row may not be the new normal. But it certainly helps when Atlantic City casinos are shut down.
A push to reopen Atlantic City casinos
Despite the major uptick in online gaming revenue, the growing losses at land-based casinos are a concern to the state’s top officials.
New Jersey State Senate President Steve Sweeney sent out a tweet on June 13, calling for Gov. Phil Murphy to open up the casinos:
To help stem the growing losses being suffered by the casinos, the state Senate passed an emergency relief bill on June 15.
The legislation gives the casinos interest-free loans along with temporary liftings of various taxes for the remainder of the year.
Bailout the casinos?
Concerns have been raised by state lawmakers over cutbacks to other programs Atlantic City needs in order to give the casinos a bailout.
But state senator Chris Brown, who co-authored the bill with Sweeney, feels differently. He considers this piece of legislation a necessary one to protect one of the state’s biggest attractions and revenue earners.
“My concern has been and remains with the families who overnight found themselves unemployed and left to deal with a broken unemployment system for the last three months,” Brown said.
“Working in a bipartisan manner, we took a step today toward saving 27,000 casino jobs while also assisting our small businesses so we can put our Atlantic County families back to work.”
What state officials, casino employees, and all those impacted by the shutdown can agree upon is that the sooner the casinos reopen the better.
A summer without the casinos would be a disastrous turn of events for the town and the state as a whole.