Online Casino Games Lift Atlantic City Revenues

By Ben Hamill - January 15 2017
Taj Mahal Atlantic City

Online Casinos originally threatened Atlantic City, now they are keeping those same casinos afloat.

There is a noteworthy irony taking place in the Atlantic City gambling industry as the land-based casinos that opposed with all their might the legalization of online gambling in the State, are now seeing more gamblers and are earning larger profits in large part because of the very success of the formerly opposed online casinos.

At one time, it was illegal to run land-based casinos in New Jersey. This changed in 1976 after a long battle with voters. The law was changed in 1976 to allow land-based casinos to operate in-state but only in Atlantic City.

CASINO in electronic lightsThe land-based casinos became entrenched and by 2006 cheered the US Congress which passed the Unlawful Internet Gambling Enforcement Act (UIEGA) which prohibited banks and credit card companies from transferring money to internet gambling establishments. Internet casinos left the US, New Jersey included.

In 2011 the Congress of New Jersey passed a law legalizing online casinos but the law was vetoed by Governor Chris Christie. By 2013, a compromise law was passed and signed by the Governor allowing online gambling to be done only through land-based casinos based in Atlantic City.

By giving Atlantic City casinos a monopoly in online gambling, the law has allowed those casinos that were able to deliver online gambling services in the fastest, safest, most efficient, and most aesthetic manner have seen their revenues increase by as much as 1.5% year to year as online gambling itself increased 32%.

Steel Pier at Atlantic City New JerseyThe land-based casinos are still losing money on their landed operations. Since the online gambling legalization went into effect only three years ago, five Atlantic City casinos have closed, leaving seven still in operation. Last year was in fact the first year in a decade that saw revenues go up for Atlantic City casinos, all owing to their success in running online casinos as an adjunct to their land-based operation.

As a dispassionate observer, Professor Donald Hoover of Farleigh Dickinson University, an expert in the gambling industry, says: "It's not even that I'm a proponent of it…[but] online gaming has absolutely helped Atlantic City." Even as small an increase in revenues of 1.5% has strengthened the surviving land-based casinos and for the time being has forestalled the loss of even more casinos.

This is good news for the tax base in Atlantic City and for all those people employed by the land-based casinos located there.