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Historically, New Jersey was only the second state to legalize some form of casino gambling, in 1976, after Nevada. A referendum passed at the time restricted casinos to being developed in Atlantic City, and this stipulation remains in place today.
Although there are 9 casino resorts in New Jersey, they are all located within the borders of Atlantic City. Despite these restrictions, the size of the gambling industry in Atlantic City means that New Jersey has the third-largest casino industry, bringing in approximately $6 billion a year in revenue.
There has been a considerable change in NJ gambling in the past few years. Players looking to land a 5 card Charlie at the blackjack table, which, according to casino writer Tom Middleton can give players an extra edge over the house, have been able to play at online casinos since 2013. In October 2024, online casino revenue was higher than that of physical casino revenue for the first time, under normal operational circumstances.
Online casinos continue their march in the state, despite the fact New Jersey is one of only seven states to have regulated iGaming, so far. During October, iGaming casinos generated $213.6 million for the month, compared to the $208.7 million generated by physical casinos in the state. This represents a 28.1% increase compared to the same period last year, while physical casinos saw an 8.5% decline in year-on-year figures.
Overall, total gambling revenue rose 2.6% to $499.8 million, while year-to-date, the figure is up 9.3% and currently stands at $5.22 billion. This includes online and offline casinos, as well as revenue from racetracks.
While the surge of online gambling may be partially to blame for the reduction in physical casino revenue, New Jersey’s gambling industry has been under threat from other channels, too.
Neighboring Pennsylvania legalized casinos in 2004 while Connecticut made the move way back in 1992. Connecticut has gone on to legalize online casinos in 2021. New York signed an amendment in 2013 to legalize Vegas-style casinos in the state and has made moves in recent years to further increase the number of physical casinos on offer.
There are currently around a dozen groups vying for several new casino licenses that will be granted within the city itself. The rise of physical casinos in neighboring states has seen New Jersey’s casinos directly lose visitors from these states, while many visitors may now opt to visit the likes of New York instead of heading into New Jersey.
When New York signed the amendment opening up the state to physical casinos, it allowed for seven licenses to be granted. It was decided that the introduction would be introduced in two stages. Four upstate casinos were granted licenses at that time, but it was agreed there would be a wait before the remaining licenses would be granted. The process has dragged on, but the state will likely grant the new licenses in the coming years and this could pose yet more problems for New Jersey.
Four casinos had closed their New Jersey premises by 2014, and if New York continues its expansion as planned, this number could increase.
Furthermore, online casinos continue to gain traction. They offer players greater convenience and they tend to be more generous with regards to bonuses and offers, therefore putting them in a better position to attract new players. This won’t harm the overall gambling industry in the state, but it may lead to further erosion of the physical gambling market.
