The casinos in Atlantic City may be shut down for the time being thanks to the coronavirus pandemic gripping the country, but New Jersey is still finding a way to generate revenue off gaming.
New Jersey is one of three states that allow online casinos, or iGaming. And even before Gov. Phil Murphy ordered the state’s retail casinos to close March 16, iGaming was already enjoying a successful start in 2020.
Through the first two months of the year, revenues at the land-based venues were up nearly 10 percent to $410.2 million. During the same time frame, revenues at the online sites shot up 63.9 percent to $107.1 million.
And the online numbers will likely go up in March once figures are reported next month.
DraftKings saw a 34 percent increase in active players at its online casino from March 10 to March 25, Communications Director Stephen Miraglia said. The handle for March 23 was nearly double the total wagered from the previous Monday.
New Jersey collects a 15 percent tax off the gross revenues of the online casinos – compared to 8 percent for the brick and mortar venues. Through the first two months of the year, the state has collected $16.1 million in taxes.
Comparatively, Atlantic City casinos have generated $29.2 million and sports betting has captured $8.8 million.
Online casinos offer similar jackpots as their retail brethren. Just prior to the retail casino shutdown, a New Jersey resident won more than $278,000 off a $2 online bet at PlaySugarHouse.com.
“It’s always exciting to see our players win life changing amounts,” said Mattias Stetz, COO of Rush Street Interactive, the site’s operator. “This jackpot hit made a huge positive impact in someone’s life during a challenging period of time.”
Even with the increase in iGaming, New Jersey likely won’t make up the difference it would get from the retail casinos, and the state is also expecting other revenue sources to drop as well. Last week, State Treasurer Elizabeth Maher Muoio release a voluntary disclosure statement alerting bondholders.
“The State expects precipitous declines in revenues in Fiscal Year 2020 and Fiscal Year 2021, which include significant reductions in gross income tax revenues, corporate business tax revenues, and sales tax revenues due to required business shutdowns, motor fuels taxes due to Executive Order No. 107 (i.e., “stay-at home” orders), casino-related taxes due to casino closures, and lottery sales which have already started to decline,” the statement read.
