In fact, in May 2017, the state pushed past the $100 million mark in terms of tax revenue received from New Jersey online gambling websites since NJ online gambling first launched. Plus, the next $100 million in tax revenue for the state should come in even quicker.
Collectively, New Jersey online gambling websites are now averaging a record $20 million a month in revenues. Of course, that means the burgeoning industry is generating tax revenue for the state at a faster rate than ever before.
New Jersey’s tax rate for online gambling providers is set at 15 percent. That’s almost double the 8 percent the state charges legal land-based casinos in Atlantic City. It means that online casinos are expected to generate an estimated $36 million in tax revenue for the state this year alone.
The next $100 million in tax revenue from NJ online gambling
It took approximately 42 months, from November 2013 to May 2017, for the state to earn its first $101.3 million in tax revenue from NJ online gambling sites. That’s an average of just over $2.4 million a month. With online gambling site revenues on the rise, the state is now pulling in an average of $3 million a month in tax revenues from online gambling.
At that rate, it should take just 34 months to get from $100 million to $200 million in total tax revenue paid since online gambling launched. That’s eight months faster than it took to get to the first $100 million.
Plus, seven of those months are already in the books as 2017 came to a close. If things keep going at this rate, the state should push past the $200 million mark in terms of tax revenue received from New Jersey online gambling websites by the first quarter of 2020.
Atlantic City casino industry reaping big benefits
Of course, the once-struggling Atlantic City casino industry is reaping big benefits from NJ online gambling as well.
State law dictates Atlantic City casinos are the only entities that can be licensed to run online gambling sites. According to the New Jersey Division of Gaming Enforcement, five Atlantic City casinos, or the online gambling companies affiliated with these casinos, hold New Jersey internet gambling licenses.
- Borgata Hotel Casino & Spa
- Golden Nugget Atlantic City
- Resorts Casino Hotel
- Tropicana Casino and Resort
- Caesars Interactive Entertainment
There are currently 23 different online gambling sites operating under these five licenses. Of course, a number of the sites are owned and operated by the licensees under their own brands. However, the licensees have also partnered with online gambling operators from out of state to operate alternatively-branded NJ online gambling sites.
Either way, the revenues the sites generate is added to the Atlantic City casino internet gambling licensees totals.
Atlantic City land-based casino revenues reached $2.406 billion in 2016. This was down slightly from the $2.414 billion Atlantic City casinos posted in 2015. However, internet gambling revenues rose 32 percent to $196.7 million in 2016. As a result, total gambling revenues actually reached $2.603 billion. This represented a year-over-year increase of 1.5 percent over 2015.
Turning around a decade of declines
The Atlantic City casino industry had not posted a year-over-year revenue increase since 2006. That means NJ internet gambling revenue directly helped turn around a decade of declines for Atlantic City casinos. Plus, things just keep getting better.
New Jersey online gambling websites surpassed $200 million in revenue generated in October of this year. That broke revenue records set in 2016 with two months still to come before the end of the year. With NJ online gambling sites set to post an estimated $240 million in revenues in 2017, the Atlantic City casino industry is poised to set revenue gains for the second year in a row.
After a decade in the tank, the Atlantic City casino industry is growing again, and online gambling is more than just partly responsible for the turnaround.