Amid recent reports that consumer awareness is very low in the Garden State concerning online gambling options and processes, NJ has posted its first Web gambling monthly revenue decline. Station Casinos CFO Marc Falcone doesn’t see much room for growth concerning cyber gambling in New Jersey through that state’s Ultimate Gaming websites unless public awareness is increased. During a recent investor call concerning all areas of the company’s first-quarter performance this year, Falcone said he saw a “relatively rough road ahead” for his company’s gambling product unless public opinion is improved, and awareness is raised.
The Chief Financial Officer for Station Casinos, majority owner of Fertitta Interactive and responsible for Nevada and New Jersey Internet gambling websites, also pointed out that geolocation, banking and offshore competition were other factors which were placing downward pressure on his company’s web gambling revenue generation. There are a number of legally licensed Atlantic City online casinos, sportsbooks and poker rooms which are regulated and located outside of the US, and these do provide competition to the state based options. He went on to point out that there is a “lack of awareness overall, across the state” about just how the legal online gambling operation works in New Jersey. He believes that his firm should be much more aggressive from a promotional standpoint in the future, and reported a $4.8 million loss related to online gambling operations for his company in the first quarter of this year. However, Falcone admits much of that loss was due to significant marketing costs.
On the heels of Falcone’s declaration of a low level of public awareness, the New Jersey online gambling industry saw its first month-to-month revenue drop. Ever since November, web gambling revenue has steadily, if slightly, increased. However, in March New Jersey generated $11.9 million in Internet gambling revenue. April saw just $11.4 million taken in by the state. Looking at the numbers a little more closely, we see that there was one more day in March than April. However, April generated $380,958 in revenue per day (versus March daily revenue of $383,173) so even taking into account the shorter month, the industry created less income month over month.
In the preceding months, January showed a 28% improvement over December numbers, a 9% improvement was seen in February and a 15% boost in March. However, the Internet gambling industry in New Jersey, as well as Nevada and Delaware, is extremely young at less than six months old. And some industry executives believe that growth will come as soon as a mobile platform is perfected and promoted. Joe Lupo is a senior vice president at the Borgata resort and casino, and he believes mobile Internet gambling is the key to success in the future. He also feels that seamless integration and quick web speeds via 3G and 4G connections will help drive revenue in the coming months. And as Falcone pointed out, Lupo agrees that more credit card and alternative electronic payments need to be made available to New Jersey residents.
Showing little more than $2,000 a day in decreased revenue after several months of significant increases should not cause any concern. Watching the revenue numbers over the next couple of months will be important to see if this is a trend, rather than a speed bump. As the World Series of Poker kicks off in Las Vegas, websites in New Jersey should see a boost in traffic as Internet poker players attempt to qualify for the world’s biggest live poker tournament by entering satellite, micro-satellite and qualifying tournaments online at multiple Atlantic City poker sites. Breaking down the numbers, the Borgata continues its domination of the New Jersey online gambling marketplace, with $16.4 million generated in 2014. That compares to a respectable $13.1 million for Caesars Interactive, with the Tropicana Casino and Resort earning $6.2 million so far this year.