The Silver lining to Huge PA, NJ, DE Casino Losses

The silver lining to huge PA, NJ, DE casino losses

The Mid-Atlantic’s legal online gaming states, Pennsylvania, New Jersey and Delaware all reported huge hits to their traditional bricks-and-mortar casino gaming revenue in March 2020 as the global pandemic enforced closure of their respective states land-based casinos bit hard. However, for all the rough ride of the traditional casino hotel business, there’s a silver lining – online casinos.

The bleak numbers

In the Keystone State of Pennsylvania, total gambling revenues dropped wildly from $304 million in February 2020 to a mere $153 million in March 2020 after the state’s 12 casinos were all ordered closed on March 16. Factor in New Jersey’s $124 million revenue decrease from February to March 2020, and Delaware’s 65% drop across the same period, and clearly the industry has taken a huge hit.

The situation is made all the more dire as the land-based casino closures come at the same time when major sports leagues have gone into hiatus, and sportsbooks across the big 3 Mid-Atlantic legal sports betting states are taking a big hit and not compiling revenue from the postponed NBA and NHL playoffs, nor from the postponed MLB season (although a June restart date has been touted).

The big winners are………online casinos

Online casino play has surged in Pennsylvania over the same period, with the overall online casino revenues increasing by a staggering 24%. However, due to the high state taxes on online casino revenue, the increase in online gaming revenues amounted to less than a $2 million revenue boost. It’s led to a state wide call for a reconsideration of high state online gaming taxes, something that could also assist in the nationwide call to help wipe out illegal bookies and casinos as a biproduct.

In neighboring New Jersey, the total gambling revenues decreased by a whopping 44% in March compared to March 2019. The New Jersey silver lining were also online casinos, increasing by about 65% compared to March last year. However, as in Pennsylvania, overall tax revenues still dropped overall in March, down by approximately $8 million compared to the February numbers.

In Delaware, despite land-based casino revenues falls, online gaming revenue increased by a staggering 58%, however, those numbers are small in a state where bricks-and-mortar casino numbers generally dominate the market.

Where to from here?

The biggest positive to come out of this, is that Pennsylvania’s not-long-ago fledgling online casino industry is leap-frogging its way to maturity, and in a big hurry.

Online casino gaming is undergoing an unprecedented increase popularity and uptake with the state’s bricks-and-mortar casinos closed since mid-March.

The Keystone State may have been a little slack in getting out of the starting gate with high tax rates and limited games catalogues to begin with, however, online casinos are now beginning to hit full stride.

With DraftKings choosing the midst of the lockdown to launch its PA online casino offering, it’s now clearly apparent in the Keystone State that the gaming future is a digital one.

Despite only a single operator (Pokerstars PA), online poker is booming too. PA PokerStars’ record $3.1 million March revenue result reflects that boom time, and when the April numbers are released, get ready to see an even bigger boost.

Times are hard, but without the online options it could be far worse

However, have no doubts, the pandemic and associated economic downturn is hurting Pennsylvania, Delaware and New Jersey. For example, it is estimated that the city of Bethlehem, Pennsylvania is losing out on close to $1 million a month that its Wind Creek casino remains closed.

Clearly, the online casino boom won’t cover the entire losses of the gaming industry and its cohorts, but it certainly is helping the industry to ease its financial pains.