PA And NJ Lose $274 Million In Gaming Revenue From First Two Weeks Of Casino ShutdownDespite Online Gaming Numbers Surging, It's Not Enough To Make Up For The Casino Closures |
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During the coronavirus-induced casino shutdown, online gaming revenue has soared in states where it is legal. The revenue gains from iGaming, however, don’t make up for the lost brick-and-mortar revenue with several states experiencing huge drops in gaming revenue.
Just two weeks ago, New Jersey’s Department of Gaming Enforcement released financial information that showed the Garden State hit all-time highs in online poker revenue. The state’s online poker rooms raked $3.6 million in March, as its online gaming industry was up 64.4 percent.
With only 16 days for its nine Atlantic City casinos to operate, live casino gaming only generated $85.5 million. Combined with New Jersey’s online revenue, the state only generated $163.5 million in gross gaming revenue in March, down $124 million year-over-year.
Pennsylvania, which legalized all forms of online gambling in October 2017, experienced similar gains in its online gaming market since the shutdown. Its gross gaming revenue still fell from $304 million in February to $153 million in March.
According to a report from the Philadelphia Inquirer, the two states lost $274 million in gaming revenue just from two weeks of the shutdown. When April’s numbers are released in a few weeks, it will only be worse.
Similar trends were seen in Delaware, which is in a compact with New Jersey and Nevada to share player pools for online poker.
Vernon Kick, director of the Delaware Lottery, told the paper that online gaming just doesn’t generate the revenue that the state is used to seeing.
“Even though we’ve spiked up, it’s still just a drop in the bucket,” said Kick. iGaming is a very, very small portion. It’s up considerably, but those are percentages. Our dollars are nothing to write home about.”
When revenue drops for private companies, tax revenue for the states dries up as well. The effect was felt quicker and more drastically by some locales in Southern California, who don’t have access to online gaming revenue, but that same pain will likely be felt on the east coast soon.
Parx Casino, Pennsylvania’s most profitable casino, is located in Bensalem, just outside Philadelphia’s city limits. It pays the city $11 million annually but has been closed since mid-March.
Bensalem Mayor Joseph DiGirolamo told the Inquirer that he expects to receive the first of four quarterly installments since it was operational for most of the first quarter. He doesn’t feel great about subsequent payments if the casino stays closed.
“After that I’m worried,” he said. “It’s a big part of our budget.”
The Pennsylvania state government relies more on casino gaming than New Jersey or Delaware. The Keystone State taxes slot revenue at 54 percent and table games at 16 percent. The Garden State taxes each of those activities at 8 percent.
A reopening date for casinos in all three states has yet to be announced by state officials.
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