Atlantic City Casinos Generate Record Tax Revenue Largely Because of iGaming
Posted on: October 2, 2023, 10:25h.
Last updated on: October 2, 2023, 02:29h.
When New Jersey legalized casinos in Atlantic City more than four decades ago, state lawmakers mandated that gambling would benefit not only the beach region, but the entire state. The state established the Casino Revenue Fund in 1976 ahead of the first Boardwalk casino opening two years later.
The Casino Revenue fund is where gaming taxes incurred in Atlantic City and online are directed. The fund also receives casino parking and hotel room fees, forfeited casino and sports betting winnings, regulatory fines, and a special tax on progressive slot jackpots.
The New Jersey Division of Gaming Enforcement (DGE) reveals that the Casino Revenue Fund during the state’s 2023 fiscal year (July 1, 2022, through June 30, 2023) collected record tax revenue. The account pocketed a little more than $504 million, with gaming taxes accounting for the bulk at $494.86 million.
The Casino Revenue Fund assists eligible seniors and disabled residents with property tax reductions and financial help for their rents, utilities, telephones, gas, transportation, and electricity. The spending account also helps seniors and disabled residents with health care services.
The 2023 fiscal year was the first time since New Jersey legalized casinos that the Casino Revenue Fund received over a half-billion dollars in a 12-month span.
iGaming Fueling Fund
New Jersey expanded its commercial gaming industry in 2011 with iGaming — interactive online slots and table games. Online casino platforms went live two years later after legal challenges to permitting gambling via the internet were settled.
It took several additional years for online casino gaming in the Garden State to really take off. Before the COVID-19 pandemic, iGaming gross gaming revenue (GGR) totaled $245.6 million in 2017, $298.7 million in 2018, and $482.7 million in 2019.
When the coronavirus shuttered Atlantic City’s brick-and-mortar casinos, players turned to online platforms, and GGR subsequently soared. iGaming websites and apps won more than $970.3 million from remote players in 2020, and nearly $1.37 billion in 2021.
Online gaming revenue further climbed to $1.66 billion last year, and is outpacing 2022 this year through August by nearly 15%.
The Casino Revenue Fund, initially designed to collect Atlantic City casino taxes, receives 15% of the iGaming revenue. And the increased internet play has significantly benefited seniors and other state residents in need of assistance.
The Casino Revenue Fund is critical to operating the Senior Citizen and Disabled Resident Transportation Assistance Program,” said Jim Smith, spokesperson for NJ Transit, to the Press of Atlantic City. “This program … provides transportation to senior citizens and people with disabilities and acts as a lifeline to necessities such as non-emergency medical trips, shopping, and nutrition.”
The Casino Revenue Fund saw its deposits climb 10% from the 2022 fiscal year when it received about $457.6 million.
Brick-and-Mortar Lagging iGaming
Online casinos continue to grow business, something not necessarily the case with the nine casinos down the shore. While iGaming win skyrocketed almost 22% from 2021 to 2022, Atlantic City brick-and-mortar casino revenue was up less than 2%.
The land-based casino executives continue to stress that not all gaming revenue is equal in their minds.
Much of the online and sports betting income is shared with their third-party interactive partners, like FanDuel and DraftKings. Online players and mobile sports bettors also do not purchase food and beverages in Atlantic City, stay overnight, or take in a show.
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