Three years ago, long before coronavirus turned off casino lights across America, Atlantic City appeared to be all but felted. Like a down on his luck gambler, the one-time casino Mecca seemed unable to get it together – and, even worse, was decimating its bankroll at an alarming rate.
Casinos were shutting down (three of which bore the name of Donald Trump), gambling floors became increasing unpopulated, suites went vacant. The place had come to rely on low-rolling day-trippers while fresh competition from gleaming gambling-dens in neighboring states such as Delaware and Pennsylvania made AC’s tatty joints seem particularly dumpy.
A Wall Street analyst who covers the gambling industry put it to me succinctly: “Las Vegas is the greatest place to visit for five nights. Atlantic City is the worst place.”
Then the seaside gaming destination took the need for five-day visitors out of the equation. It saved itself with fresh revenue streams and allures.
Bucking federal laws in the United States, AC’s casino executives successfully pushed for the legalization of online gambling sites plus sports betting in casino books and via apps. Remote gambling started strong and blew up in short order – in the process, spreading black ink beyond the Internet servers. “Atlantic City’s casinos have seen consistent growth almost across the board,” a city representative told Atlantic City Press last year. “We look forward to seeing positive momentum…”
This past January, New Jersey gamblers wagered $540 million on sports – in casinos, at race tracks and online. Those bets resulted in $53.5 million worth of profits for the state’s operators. Ocean Resort Casino and Hard Rock, which both opened ceremoniously on the eve of legalization in 2018, had year-over-year increases of 39.2 percent and 41 percent, respectively, as of this past January.
In fact, last year, AC’s Golden Nugget threatened to be the first casino with online revenue eclipsing that of brick-and-mortar returns. “As a trend, the growth is mostly online,” Thomas Winter, senior vice president of online gaming for the casino told Atlantic City Press. “The good news is that it’s not really cannibalizing land-based revenue.”
Now, of course, at least for the time being, with casinos shuttered, land-based revenue in Atlantic City and elsewhere is a moot point. In that regard, online gaming could not have come soon enough for the once beleaguered gambling location. While the current environment will clearly take a toll on casinos there, online stands as the sole generator of money.
And with gambling customers cooped up at home, why would they not spend more time playing via laptop and smart phone? I’ve heard anecdotes about European poker sites having increased liquidity and games populating quicker than they have in years. This point is not lost on iDevelopment & Economic Association (iDEA). It is a gambling industry trade group that is rallying for new states to legalize online gambling as a means of saving their casinos. At the moment, when such a move seems particularly critical, only six out of fifty states in the US allow it.
The hope, of course, is that places will permit online gambling as a financial life-raft and keep it going after coronavirus passes.
But even John Pappas, a veteran booster of regulated online poker who is now working for the iDEA group, acknowledged that the strategy is far from a sure thing. And he admits that it will not make up for revenues lost due to global shutdowns from Connecticut to Macau. “Is it going to be a panacea? No,” he told the Wall Street Journal last week. “But in the face of closures like this, it underscores the need for the industry to also have an e-commerce platform.”
While the suspension of sporting events has clearly taken the wind from the sails of online operators – which made way more through sports betting than from digital versions of roulette and blackjack – the ever nervy Bovada is doing what it can to stir up action as well as publicity.
Last week, the site apparently offered to take wagers on the weather (that market was inactive but visible at the time of this writing). One industry executive darkly joked about having employees don fencing suits and go saber to saber so his site could stream the competitions and provide gamble-hungry customers with something to bet on. Considering our inherent need for action, I recall the late poker genius Stu Ungar telling me, “I’ll bet on a cockroach race if I can.”
Though sites have thus far eschewed taking wagers on speedy pests, Russian and Turkish football have appeared on the boards. But they come nowhere close to covering for the scuttled March Madness, which, normally, would be raging right now and generating an annual windfall for online operations in Atlantic City and beyond. While the general consensus is that states – and the casino industry as a whole – currently have more to worry about than stoking the spread of online gambling, the thirst exists for things to wager on and tax dollars are needed more than ever.
Chris Grove, a gambling analyst, envisions a 75 percent online revenue drop in the US as a result sports being temporarily sidelined. But he also makes the point that gamblers have got to gamble: “I think in states where they have online betting, you’re seeing bettors [going] to their phones and [seeing] no sports happening and switching over to the casino games.”
There’s also been an increased number of people wagering on computer games such as Madden, NBA2K and FIFA. According to the Washington Post, typical entry fees for multi-player competitions are around $20, but, clearly, the video games are merely something to wager on until the virus runs its course and sporting events return.
While nobody appears to be wagering anywhere close to the $10,000 nosebleed stakes for which rapper Lil Wayne supposedly played Madden as a time killer while in the recording studio, it’s something and it has been a boon for computer-game wagering outlets such as One Up and Players’ lounge. Not exactly complaining, Players’ Lounge chief executive Austin Woolridge told Washington Post, “We’re at this intersection of no sports to watch and nothing to bet on. It’s an opportunity to engage in a new format for the first time.”
As to where things will land, there is speculation that states might eventually begin taking wagers on political races – commonly offered in Europe, of course, but still verboten in the US. And if they don’t? Well, I know a couple of talented cockroaches we can match up.
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