New Jersey Online Gaming Sets Records Again

Summary: The revenue numbers for New Jersey online gaming in November are in with the state hitting a new record yet again.

New Jersey continues to be the state to beat when it comes to online casino gaming. Month after the month, the state sets new records as their online casino gaming industry continues to improve and reach new heights. Lawmakers in other states are looking to New Jersey as an example as they begin to create legislation of their own to begin offering online casino and/or poker gaming. The November revenue totals for NJ have been provided by the Gaming Control Board, with a new record set again.

New Single Month Record

New JerseyAccording to the totals, the state’s online gambling revenue total came in just under the $27 million mark with casino and poker gaming combined. This was just over the previous month’s record total. Online casino gaming was able to contribute over $25 million in earnings last month.

In total, the state brought in $26,944,073. This is the highest monthly earnings ever for the state since online gaming launched in 2013. Online casino revenues brought in the bulk of that number, at $25,382,434. This was a new record for online casino gaming, breaking the record set just one month prior in October.

With the November monthly total, the state was able to see online gambling earnings surpass the $20 million mark for 21 months in a row. Revenues were over the $25 million for three months running. When looking at November 2017 totals, the state was up over 30%.

November Results

In the state, the top operator continues to be the Golden Nugget. The casino operator has been able to take a huge lead month after month. For November, the brand earned just over $9.2 million which is actually slightly lower than what was earned in October. While this helped to narrow the gap, the next casino operator in line for online gaming totals is literally millions of dollars behind.

The Borgata continues to hold the number two spot, earning $4.7 million in November. While this is much lower than the Golden Nugget, it is relatively high and shows that other brands are continuing to do well.

Online poker continues to struggle when compared to online casino revenues. For November, online poker was actually down and hit a record low. Bringing in only $1.56 million, the online poker segment was down 2.4% month to month and 13.7% year over year.

Back to the Borgata. The online casino operator was able to see a revenue increase of 13.5% with their $4.8 million in earnings. This is just short of their record setting July figures. Caesars was actually able to do well with online poker, seeing an increase of 8.7% when comparing totals. The Hard Rock Atlantic City is relatively new to the online gambling scene having only been in operation just over five months. The brand hit the seven-figure mark for the first time in October and hit it again in November with $1.3 million in revenues.

New Jersey will continue to be the most watched state when it comes to online gambling as a whole. The state has a quality model that is being examined by states across the nation as more states look to enter the online casino and poker industry. It will be interesting to see how December totals fare and if the state is able to hit even more records as 2018 comes to an end.

Citizens Budget Commission Warns New York Lawmakers of High Sports Betting Taxes

Summary: In a report titled Hold Your Bets, the Citizens Budget Commission has provided advice involving the sports betting industry for New York, warning lawmakers to avoid high taxes on the new industry.

Sports betting is thriving in the United States as several individual states have already passed legislation regarding the industry. So far, Delaware and New Jersey along with Mississippi and West Virginia have launched services. For New York, the process of allowing sports betting within the states borders has slowed down. The Citizens Budget Commission recently released a paper to give lawmakers advice as to what they feel legislation involving sports betting should provide. The advice includes avoiding any high taxes on the new industry.

Hold Your Bets

The paper created by the group is titled Hold Your Bets and provides several key points that they feel the New York lawmakers should be focusing on. The group feels that revenue estimates should be conservative, with taxes designed to create a competitive marketplace.

The Commission also feels that the potential impact of sports betting for other gambling activities in the state should also be considered. Legislation should also be considered that takes into account the prevalence of gambling and the social impact cost.

The Commission was created in 1934 and self-describes the group as a nonpartisan and nonprofit civic organization that has a mission to achieve a constructive change in finances and services in the state of New York as well as New York City. The position of the group is to give advance and to help avoid any bad legislation from being created if the state decides to legalize sports betting.

High Taxes Need to Be Avoided

The section involving high taxes in the paper is something that lawmakers should truly consider. Across the United States, sports betting taxes are currently pretty low. In Nevada, the rate is 6.75 while New Jersey has a rate of 8% for casinos and racetracks while online sports betting sits at 12%. In Pennsylvania, the rate has been set at 36% which seems to have kept operators from applying for licensing. Only two operators have filled out applications for sports betting licensing, which is not what lawmakers of the state anticipated.

In New York, the Commission has suggested that because of competition in surrounding states, New York should be sure to set online gambling taxes that will allow the state to remain competitive. High taxes will deter people from entering a regulated market.

With a lower tax rate, operators will be able to spend more on their marketing and customer support as well as investing more in the technology used which will make the market more attractive to bettors. With higher GGR tax rates set, fewer operators will be able to operate in the local industry, which will mean less investment on the marketing and infrastructure side as well as less attractive sports betting odds.

With higher tax rates, fewer people will transition from illegal sports gambling to the legalized option. it would be more profitable for everyone in the long run to provide lower tax rates for everyone involved.

The Commission also pointed out revenue estimates for sports betting should be conservative. In the past, the state has overestimated regarding the gambling industry. For licensed casinos in the state, it was estimated that the gaming venues would bring in hundreds of millions each, yet that has not been the case. The four resorts have only produced $112 million during the 2017-2018 fiscal year.

The Commission providing advice that asks lawmakers to err on the side of caution. It will be interesting to see if they choose to do so and how the state is affected based on what rate is chosen if sports betting is legalized in New York.

Nevada Gaming Revenues Decrease in July

Summary: Gaming revenues declined in Nevada for the month of July, with the Strip seeing an almost 6% drop.

Every month, the Nevada Gaming Control Board provides an inside look at the earnings from the casinos in operation throughout the state. For July, the numbers were less than impressive, with the overall earnings dropping, mainly due to the decrease on the Las Vegas Strip.

First Decrease Since January

Nevada Online GamblingThe monthly gaming revenues for July were lower than normal, marking the first time the state had seen a monthly decline since January 2018. The drop was led by a decline on the Las Vegas Strip of 5.75%. Reportedly it was the lack of events and a room rate decline that caused the numbers to decrease in the gaming sector.

For July, the Las Vegas Strip casinos earned only $533.1 million. This was a sharp decline from the $565.6 million earned the same month on 2017. Looking at statewide revenues, Nevada earned $996.4 million which is less than 1% from the previous year.

While the Strip was down, other areas like the South Lake Tahoe region and North Las Vegas were up, reporting record double digit revenues for the month. According to analysts, the results were disappointing but it has been estimated that gaming only counts for around 25 to 30 percent of the casino revenues on the Las Vegas Strip, which will vary based on operator and the business model used.

Strip Numbers

When looking at the numbers for the Strip, baccarat saw an 18% decline in revenues with slot machine revenues falling close to 5%. Hurting the area as well was the drop in visitor numbers. The Las Vegas Convention and Visitors Authority reported that visitation dropped just over 3% to less than 3.66 million visitors. The drop in visitors was reportedly due to a decline in convention attendance which was down almost 20%.

July was also not as lucrative due to the 4th of July holiday falling on a Wednesday. The region does much better when the holiday is on a weekend. While the Strip did poorly for the month, the locals market did quite well. The Boulder Strip was up over 18% while the casinos in North Las Vegas was up almost 15%. An 8% increase was seen with revenues generated from the casinos in Downtown Las Vegas.

South Lake Tahoe was the big winner, with revenues up 25.5%. The region earned a total of $29.9 million. On the downside, gaming in Reno decreased by 1.4%. While Reno does use revenues from their gaming industry, they benefit more from the major tech companies that have moved into the region.

While no one is particularly worried about the lower revenue earnings, companies are being affected by the decline in revenue, as well as competition from Nevada online casinos.

Mark Frissora is the CEO of Caesars Entertainment who recently warned the companies shareholders that they were not increasing their financial outlook for the third quarter as Las Vegas had seen softening in demand due to fewer events.

The stock for Caesars dropped close to 3% yesterday due to the news of the July revenues report.

MGM Resorts saw a decrease in stock of 2.4% with the Las Vegas Sands dropping 0.7% and Wynn Resorts dropping 0.15%.

It will be interesting to see if the gaming companies can make a comeback in August. The revenue reports should be released in the next few weeks as August comes to an end and the revenue reports are finalized for each area of the state.