New Jersey’s iGaming success has established it as a benchmark for regulated online gambling, both domestically and internationally. The state’s robust regulatory framework, implemented by the Division of Gaming Enforcement, has created a thriving market that balances consumer protection with industry growth.
New Jersey’s online casino ecosystem now features over 30 brands, offering a diverse range of gaming options from slots to live dealer games. The market’s maturity is evident in its financial performance, with iGaming revenue reaching $195.4 million in July 2024, a 25.9% year-over-year increase. This growth has occurred alongside, rather than at the expense of, land-based casinos, addressing initial concerns about cannibalization.
However, the state’s iGaming platforms have a lot of international competitors that could be preventing the sector from reaching maximum growth. The best casinos overseas attract New Jersey iGamers by offering a wider game variety, mobile accessibility, and better responsible gambling measures.
Record-Breaking Revenues in 2024
In August 2024, New Jersey’s online casino industry reached another milestone, with monthly iGaming revenues climbing to an incredible $198.4 million. This figure is a 27.8% year-on-year increase and further narrows the revenue gap between online and land-based casinos. The continual rise in iGaming profits points toward a significant shift, as more gamblers favor the convenience and variety offered by online platforms over traditional casino experiences.
Shifting Market Dynamics: Online vs. Land-Based Casinos
The rapid rise of iGaming in New Jersey is reshaping the state’s entire gambling industry. In April 2024, online gambling revenue grew by 18.2% year-on-year to $187.9 million, while land-based casino revenue continued its downward trend, falling by 6.3% to $216.8 million. This variation highlights a broader shift, with more players opting for the convenience, anonymity, and variety provided by online platforms.
The trend is not new, but its acceleration has been significant. With players increasingly moving toward online platforms, traditional brick-and-mortar casinos are under pressure to adapt. This shift could see an even greater balance in revenue generation between online and physical casinos in the coming years, if not an outright takeover by the online sector.
Leading the Charge: Operators Driving Growth
The success of New Jersey’s iGaming sector is attributed to the strong performance of several key operators. By focusing on user experience, innovative game offerings, and leveraging advanced technology, these platforms have cemented their position at the top of the market. In April 2024, leading operators posted substantial revenue gains, with growth rates of up to 27.5% compared to the previous year.
This competitive environment has led to continuous improvements in the quality of online gambling platforms, benefiting players through better user interfaces, enhanced customer service, and more diverse gaming options.
Sports Betting: An Important Factor
Sports betting has also played an instrumental role in boosting New Jersey’s overall gambling revenue. In April 2024, sports betting revenue surged by 46.9% year-on-year to $106.2 million. Strategic partnerships between sports betting platforms and local venues have been a key driver of this growth, demonstrating the value of collaboration in the modern gambling landscape.
Despite a year-on-year decline in sports betting revenue in August 2023 (down 34.7%), the sector remains strong. Total wagers reached nearly $700 million, indicating that player interest remains high, even as market hold percentages fluctuate. With mobile sports betting becoming more widespread, operators are optimistic about the long-term prospects of this sector.
Economic Impact and Tax Revenue Growth
iGaming has not only reshaped the gambling landscape but has also contributed significantly to New Jersey’s economy. The state collected $449 million in gaming taxes in 2022, setting a new record and surpassing the previous peak by 8.9%. Online gambling taxes now account for nearly half of all gaming-related taxes in New Jersey. When factoring in the online portion of sports betting, that number rises to 65%, further emphasizing the fiscal importance of the digital sector.
In August 2023, total gambling revenue in New Jersey reached $555.1 million, a 4.4% increase from the previous year, underscoring the state’s continued growth. Year-to-date figures for 2023 suggest that New Jersey is on track to break previous records, with total market revenue for the first eight months climbing to $4.16 billion, an increase of 10.5% compared to 2022.
Challenges for Land-Based Casinos
The continued rise of iGaming poses significant challenges for traditional casinos. In April 2024, land-based casino revenue fell by 6.3% to $216.8 million. This decline is part of an ongoing trend, with revenue dropping in three of the first four months of the year. The convenience and variety offered by online platforms are proving hard to compete with, especially as more players turn to digital alternatives.
While land-based casinos still hold a critical place in New Jersey’s gambling ecosystem, they are facing increasing pressure to innovate. Many are exploring ways to blend in-person experiences with online engagement, offering hybrid experiences to attract tech-savvy gamblers. Loyalty programs, enhanced customer experiences, and partnerships with online platforms could provide avenues for these traditional establishments to remain competitive in an evolving market.
Looking Ahead: Continued Growth and Potential Roadblocks
Industry experts remain optimistic about the future of New Jersey’s iGaming sector. It is projected that online casino revenues could reach as high as $3 billion within the next decade. As the market matures, operators are expected to introduce more innovative offerings, capitalizing on technological advancements such as virtual reality (VR) and augmented reality (AR) gaming experiences.
However, the industry may face hurdles. Proposed tax hikes aimed at raising the tax rate for online gambling and sports betting from the current 15% and 13%, respectively, to as much as 30% could impact profitability and operator investment. Such regulatory changes could alter the growth trajectory, making it essential for operators to adapt to evolving tax structures and regulatory frameworks.
About the Author/s
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.
