Atlantic City Casino Gambling and the Coronavirus

Coronavirus Graphic and the Atlantic City Skyline

Everyone that’s interested in gambling is probably already aware that the coronavirus pandemic has affected casino revenue. Frankly, as I write this, many traditional and land-based casinos are still closed for business.

But I thought it would be interesting to specifically look at what’s happening in specific major casino destinations as a result of these surreal times.

And it seems like a post about Atlantic City casino gambling is as good a place to start as any.

Atlantic City Casino Gambling Was on the Rise

Before the pandemic, gambling revenue in Atlantic City casinos had shown consistent increases for 21 months in a row.

Compared to last year, casino gambling revenue is down over 42%. This makes sense, as Governor Phil Murphy ordered the closure of all the casinos for months.

If you look at the average daily revenue for gambling machines and table games, though, revenues for Atlantic City were showing the same year-over-year increase that you’d expect.

And if you look at year over year revenue, numbers are down only 3%. But that is expected to go up by the year’s end. Unless the casinos are able to return to previous numbers, which is doubtful, gambling revenue for Atlantic City will likely be down year over year by close to 100%.

Golden Nugget Atlantic City Casino

But New Jersey also offers online gambling, so the state won’t see a complete erasure of casino revenue. In March, online gambling revenue was up almost 66% over last year. And, while that’s not as much revenue as you’d see from the brick and mortar side of Atlantic City gambling, it’s still tens of millions of dollars.

Sports betting has also suffered, even though it’s still in its infancy in Atlantic City and New Jersey as a whole. That’s not because people have lost their interest in betting on sports, though, it’s simply because there are fewer sports to bet on.

$6 million might sound like a lot of money, but compared to what New Jersey expected last month, it’s pennies on the dollar.

Importance of Online Gambling for Atlantic City and New Jersey

With the difficulties that brick and mortar casinos and sportsbooks are facing, the online gambling side of the business has increased in importance.

The revenue generated from real money online casinos won’t keep the New Jersey gambling afloat by itself, at least not in its current form. But it’s an example of how important legal, regulated gambling could be to the industry in other states which have yet to launch legal, regulated online casinos.

And with the economy in such rough shape, the state is relying on taxes from the online gambling side of things more than ever, too.

In an average month before the pandemic, New Jersey would collect $20 million in taxes from casinos (or more). That number is now to closer to $6 million.

Atlantic City Casinos Reopenings

According to a small informal survey, conducted during the casino closures, by a journalist for the Atlantic City Weekly, only about 10% of the regular casino gamblers in Atlantic City had interest in coming back to the casinos.

After all, what could be more crowded (and potentially unsanitary) than an Atlantic City casino?

Here are some of the common things people were saying about returning to Atlantic City casinos.

  • “I’m going to go back to the casinos but only the ones offering great promotions.”
  • “I’ll go back to the casinos but only during off-hours when there are fewer gamblers there.”
  • “I’ll look for other forms of entertainment for at least the next few months.”
  • “I won’t go back to the casinos until I’m SURE it’s safe.”
  • “Playing cards and chips are likely to be handled by people sick with the virus.”
  • “I might go back if they practice social distancing at the slot machines.”
  • “I miss the other gamblers more than I miss the gambling itself.”
  • “What’s going to happen to my preferred player status with the players club?”

Of course, this is all just based on one journalist talking to 100 random gamblers.

More Safety Concerns Amid Coronavirus in the Casino Age

One of the most common safety concerns during all of this is the chances of getting the coronavirus on a casino trip. Is it even possible to maintain anything resembling social distancing in a casino?

Many gamblers don’t think so. Even with measures put in place, gamblers who are drinking are notoriously oblivious to personal boundaries and space issues.

Others worry that the economic conditions caused by all this will result in having less money to gamble with. Since life has slowed down for most people, the idea of speeding things back up with casino gambling might not be too appealing.

Man Cleaning a Slot Machine

One of the people interviewed in that previous Atlantic City Weekly article I referred to pointed out that risking your life to play a penny slot machine with an 85% payback percentage doesn’t make a lot of sense.

Some gamblers claim to have given up casino gambling altogether.

My guess is that land based casinos will see the same phenomenon as other aspects of the economy. It will rebound, but it won’t rebound quickly.

The economy, even the gambling economy, isn’t like a light switch you can turn on and off. It slows down gradually, and it speeds back up even more gradually.

More About Online Gambling in Atlantic City

One of the most popular things for gamblers in Atlantic City New Jersey online gambling, but it’s asking a lot of the internet gambling industry to save the entire casino gambling scene in Atlantic City.

February is a good example of how big a deal online gambling is in Atlantic City. The casinos took in $500 million in bets on the Super Bowl.

So, yes, online gambling is a big deal in New Jersey, but a big percentage of it just disappeared when the various sports leagues delayed their seasons.

What does that mean? Casino games and player versus player poker is driving the internet gambling revenue for the state of New Jersey.

That’s not great news for the industry, as online sports betting has been driving the increase in internet gambling in the state for the last two years. In fact, online poker is trending downward in the state.

Online gambling makes up less than 20% of the industry’s revenues.

What Did the Big Casino Corporations Do in Atlantic City?

MGM Resorts was one of the first casino companies to shut down all their casinos. I guess they could read the writing on the wall and decided to get ahead of the decision before it was forced on them by the government. They own the Borgata Hotel and Casino in Atlantic City.

Other global companies were prepared for these shutdowns because they went through the same experience in Macau earlier this year. The problem is that Atlantic City casinos aren’t sitting on piles of cash as big as the Macau casinos.

And Atlantic City casinos and sportsbooks were relying heavily on gambling revenue from upcoming sporting events that have since been canceled.

Borgata Atlantic City During the Day

March Madness, for example, is a big revenue driver for sports betting, but not this year.

Some casinos are positioned differently in the online sector, too. Golden Nugget generates more revenue online than in their brick and mortar casino.

The Borgata, on the other hand, generates more than 85% of its revenue from its brick and mortar casino. Hard Rock and Tropicana also do the overwhelming majority of their business in their traditional venue, rather than online.

And some casinos in Atlantic City have no online presence at all, or they have such a small online presence they might as well not have one. Bally’s, Caesars, and Harrah’s have no online gambling available. And Ocean Resort only does 2% of their business online.

Conclusion

What does the future hold for Atlantic City casinos and gambling after the coronavirus pandemic situation dies down?

Some of that depends on how long this lasts. Some casinos in Atlantic City are well-positioned because of their online presence. For example, Golden Nugget will likely come out of this situation looking better than most.

The casinos with a weak online presence, on the other hand, might not be in business anymore when this ends. Some of that depends on the availability of government bailouts. Some of it also depends on the strength of the corporation behind the casino.

I’m as curious as anyone else as to what things will look like after the dust settles.