November DGE numbers flatten, internet gaming continues momentum

The New Jersey State Division of Gaming Enforcement released November figures. 16, which showed a leveling off for brick-and-mortar as internet gaming continued to surge.

Total Casino Win for the state’s nine casino properties was $214.5 million, a 3.7% increase versus last November, with Total Gaming Revenue checking in at $441.1 million, a 0.3% increase versus November of last year.

While there are positives to glean from the trends heading into the end of 2022, there has been a cooldown over the last few months, following the summer, and especially versus 2019.

Bokunewicz

Bokunewicz

“Gross gaming revenues earned from slots, table games and poker have struggled in recent months to meet 2019 revenue levels,” said Jane Bokunewicz, faculty director of Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism (LIGHT), Stockton University, who analyzed the report.

Bokunewicz pointed out, though, that year-to-date brick-and-mortar gaming revenues ended November at $2.57 billion — exceeding 2021 and comparing favorably to pre-pandemic levels, while battling current economic headwinds, such as inflation.

“While an encouraging sign of post-pandemic recovery, this modest performance may not be enough to offset recent increases in operating expenses, which are well above those of 2019,” said Bokunewicz. “The industry could be facing strong headwinds finishing out 2022 and beginning the first quarter of 2023, as a traditionally slow season period aligns with ongoing broader economic concerns.”

Internet gaming continued its hot streak with a total win of $146.2 million reported by operators — a 23.9% jump from last November.

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STOCKTON UNIVERSITY

“Going into winter 2022, internet gaming continues to be the star of Atlantic City gaming operations – representing 37.7% of total gross gaming revenue earned by Atlantic City casino operators in the month of November, compared to 32.6% in November 2021 and 17% in pre-pandemic November 2019,” said Bokunewicz. “Year-to-date, internet gaming revenue for 2022 ($1.5 billion) has increased 22% over year-to-date 2021 ($1.2 billion) and 248.7% over year-to-date 2019 ($433.4 million). Internet gaming revenues have seen remarkable gains since the start of the pandemic, more than doubling their share of total year-to-date gaming revenue for Atlantic City operators in November 2022 (34.9%) compared to the same period ended November 2019 (14.3% ).”

And while internet gaming is a major source of income and economic activity for AC’s casino operators, Bokunewicz stressed that it is not a substitute for in-person gaming.

“Which, in addition to generating gaming revenue, generates complementary revenues from the resorts’ nongaming amenities, such as lodging, dining and entertainment,” said Bokunewicz. “It should also be noted, casino operators share a portion of the revenue from internet gaming with third-party providers.”

She added that the economic headwinds may affect both internet gaming and brick-and-mortar figures.

“While impossible to predict, it may be reasonable to expect a slowing of internet gaming revenue growth and modest, if any, growth in brick-and-mortar revenues because of these external pressures,” said Bokunewicz. “Depending on their business models, each Atlantic City gaming property may weather these challenges differently.”

Sports betting slumps?

Meanwhile, the sports betting handle once again crossed the billion-dollar threshold at $1.1 billion with a gross revenue of $80.4 million, but represented a 29.9% decrease versus last November.

“New Jersey slowed down those massive gains in handling and revenue this November, but are still up over October, even if the margin is just over 3% for both,” said TopNJCasinos.com in its analysis of the report. “While still over the billion-dollar sweet spot in wagers placed, December and January will set the tone for the year to come, and as of right now, it looks uncertain if Jersey will be able to maintain these numbers.”

That sports betting trend comes as operators face not only those aforementioned economic headwinds, but also increased competition from neighboring states.

“The persistent year-over-year decline is another thing [keep a] close eye on, especially as the dearth seems to be getting bigger and bigger each month,” TopNJCasinos.com added. “Similar patterns are also beginning to surface in other mature markets, and may be indicative of a larger, long-term slump in sports betting to come.”

All told, there are positives and negatives to take out of the November report. The industry has made huge strides coming out of the pandemic in 2022, setting the stage for an eventful 2023 for Atlantic City.

“It is important to keep in mind that, despite these challenges, the Atlantic City industry, as a whole, is still trending ahead of total 2021 gaming revenues and is on track to generate near-term record total gross gaming revenue records by year- end,” said Bokunewicz.