Jersey” title=”New Jersey Casino and Sports Betting”>Photo by Dusan Kipic on Unsplash
Casinos, racetracks and sportsbooks, along with their online partners, generated about $510 million from customers in May. According to official data from the New Jersey Casino Control Commission, the figure represents an increase of 8.3% compared to the same period of the previous year.
Commission President James Plousis links the increase in gaming activity to growing consumer interest. Plousis stated:
“May was a promising start to the summer season and positive momentum has been building. “Consumer interest has been strong, driven by unique and not-to-be-missed investments recently made in casino hotels.”
Revenue from in-person vs. gambling Online gaming figures
Casinos often prioritize winnings from in-person players because revenue earned online is shared between partners and third parties. Unfortunately, only three casinos had higher in-person gaming revenue last month than in May 2023. Borgata’s revenue rose 1.5% from a year ago to $61.4 million, while Hard Rock hit 50 million dollars, an increase of 28.6%. Ocean also rose, rising 7.5% to about $32 million. The reduction in online demand may be due to an increase in alternatives, as players visit some of the best betting sites abroad for more access to options with games, bonuses and promotions.
Aside from Borgata, Hard Rock and Ocean, New Jersey casinos experienced varying levels of declines, with Tropicana posting the highest revenue at $20.1 million, but also the biggest drop at 7%. While Harrah’s fell 4.2% to $18.2 million, Caesars lost 2% to about $18 million and Bally’s fell 5.8% to $12.4 million.
Adding income from Internet gambling and sports betting places Borgata in the number one position in income, reaching $111 million, although with a drop of 0.3%. Resorts had the lowest revenue overall, falling 0.4% to $13.5 million. Overall, New Jersey casinos and tracks received about $839 million in bets and retained $78.7 million after paying out winning bets. From January to May, casinos and tracks kept $513 million in revenue after handling more than $6 billion in bets.
May was a healthy month for online casinos in New Jersey, which posted their second-highest numbers in a month. Online platforms recorded revenue of $192 million in May, Only surpassed by the record of $197.2 million set in March. So far in 2024, online betting platforms have seen a 20.6% increase to $942.8 million. The numbers are interesting, considering that online casinos have been operating since 2013. In 2023, these service providers reached an annual record of $1.9 billion. Interestingly, estimates suggest revenue of $2.26 billion by 2024, surpassing the 2023 figure by more than $350 million.
Lower profits and other declines despite good revenue figures
Despite the promising figures, the director of the Lloyd Levenson Institute at Stockton University has expressed caution. According to Jane Bokunewicz, these high figures may not translate directly into good profits for the casinos, which highlights the increase in expenses.
“While revenues increased, so did expenses, and while month-to-date and year-to-date revenues compare favorably to prior periods, they may not translate into similar increases in gross operating profit in the future. “, he pointed.
However, it seems to indicate that users continue to gamble despite the effects of inflation that affect both casino operators and their customers. Bokunewicz said:
“Inflation affects both operators, in the form of costs of goods and salaries, and consumers, in the form of prices. “That makes it especially interesting that, even in times of inflationary pressure, consumers still seem willing to spend their discretionary money at New Jersey casino operators.”
Isolated sports betting revenue shows a decrease in May compared to the previous month and the previous year’s figures. The total profit of all operators reached 78.8 million dollars, which represents a drop of 4% compared to the 82.2 million dollars registered in May of last year. The decrease is greater compared to April’s $106.2 million, which is a 26% reduction.
The state’s sports betting total also fell from more than $1 billion in April to $838.9 million in May. Interestingly, this made May the first month of 2024 with total sports betting under $1 billion. However, it is important to note that handling in May 2023 increased by 8% compared to last year. However, these numbers are expected to improve starting in July/August, when baseball begins to take center stage.
From January to May, New Jersey has received more than $10 million in sports betting taxes, adding to the state’s historic $500 million. New Jersey’s tax revenue has already increased by $66 million compared to the same period in 2023.
New Jersey gambling tax may increase
Unfortunately, the high numbers have spurred some measures to increase taxes. Currently, New Jersey collects 15% of gross revenue from online gambling and 13% from sports betting. However, according to a new bill Introduced in April, Sen. John McKeon wants New Jersey to collect 30%. Senate Bill 3064 seeks to modify public laws that specify tax amounts on online gambling and sports betting. If successful, the law will take effect on January 1 after the date of enactment.
The passage of this bill may reduce the profits and purchasing power of operators, causing a struggle in overall costs. While the new tax will make New Jersey’s casino tax regime one of the highest, it would still be lower than New York’s 51% sports betting figure and Pennsylvania’s 36% GGR tax. However, at 30%, New Jersey’s rate would be higher than West Virginia and Michigan, at 15% and 20%, respectively.
A tax increase may benefit offshore betting sites, especially those that support crypto betting. These platforms allow users to enjoy the same casino games without worrying about restrictions that may hinder regular gaming activity. Additionally, the new tax may force casinos to increase user charges or make general gameplay changes to favor operators. Using digital assets to place bets and withdraw winnings solves this problem as payments are peer-to-peer.
As in other industries, casino gambling is also prone to fraud, as highlighted by a recent 57-month sentence handed down to a New Jersey tax reporter for perpetrating a $4. 49 million dollars. Omar Khater, of Fairfield, used stolen identities to report false casino winnings on tax returns and successfully received nearly $4.5 million in refunds from the Internal Revenue Service (IRS). Together with a relative, Walid Khater, Omar used the information of several people without their consent. Both parties have confessed to charges of conspiracy to defraud the IRS and conspiracy to commit wire fraud.
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