New Jersey Gambling Has Shown to be A Great Equalizer for Smaller Casinos
Its one of the biggest surprises, New Jersey’s online gambling industry has shown in the performance of Golden Nugget Casino. Golden Nugget is a land-based casino who’s revenue market share was just 8% in 2016. Please note: The Market share data does not include the Trump Taj Mahal’s 2016 revenue. During 2017 thus far the Golden Nugget has continued to surge, and they now have excellent stake of the online gaming market of 28.4% recorded in March 2017. The closest to Golden Nugget’s online operator is the land-based Borgata, which clocked in at 20% during March 2017. This divergence is not limited to the Golden Nugget and Borgata casinos, and raises a key question: How important are the land-based casino brand with regards to the online realm? If New Jersey is an example, then a strong brand will set the properties up for success.
The power of big brandsBorgata and Caesars capitalize on their strong, and well-known brands. This was done by leveraging their very large customer databases and by using their marketing budgets. It’s not surprising that both of casinos were showing quick gains in their leads with regards to the NJ online casino market. Over the first year, the placement of a casino on the monthly online revenue report, and it showed where they fell on the state land-based revenue lists. Of the casinos still operating, Borgata stood out in front, and Caesars following them, Caesars was greatly helped by them having three casino brands on the market), next came Tropicana, and then the Golden Nugget.
Slow and Steady The Race is WonThree years later, the landscape had undergone a major shift. The highest online revenue generators are no longer lined up with the highest land-based casinos. The situation now is the Golden Nugget right out in front, with the Resorts close on the heels of Borgata. It gets even more interesting when using land-based revenue as the baseline for a casino’s online market share and what it should look like. When viewed this way, the two top land-based casino operators who are based in Atlantic City showed that they are significantly under-performing online, at the same time the bottom two land-based casinos are showing a significant over-performance.
The 2016 B&M Market Share
- Three Caesars casinos showed 39.8% 19.7% -20.1%
- Borgata showed 33.1% 23.9% -9.2%
- Tropicana showed 12.9% 18.8% +5.9%
- Golden Nugget showed 8.2% 21.5% +13.3%
- Resorts showed 6.1% 16.2%+10.1%
Complacency vs. RiskApart from the standard improvements, all of the New Jersey online gambling sites made, the products online from Tropicana, Caesars and Borgata have not changed much since their initial launch during November 2014. The only major change over the period at that time, was an addition of the Pala brand which fell under Borgata. Borgata has relied on their brand and they trusted their early decisions in relation to their partnerships to marketing. Golden Nugget on the other hand, haven’t been idle, they added two strong brands in the Betfair online casino and the Philadelphia-based SugarHouse Casino. They have also :
- Switched platform providers
- Added live dealer games
- Are in the process of bringing out virtual sports.
Is This Why a PA Casino Are Worried About Online Gambling?Because of the ubiquity of the internet, it allows the smaller casinos in far-flung locations to be able to compete with the big casinos. This dynamic probably explains why the bigger casinos that are based in California and Pennsylvania will only be interested in online gambling if it is based on their terms. Having a strong online presence needs a very dedicated team as well as a good product. Online operators possessing both these things are able to negate the advantages of Philadelphia’s Parx Casino. Because of this, Parx casino unless it can get a few favourable concession has little reason to support online gambling. Parx’s Casino has a massive player database, is a recognized brand, has easy access to many of the major population centers which will be helpful if and when online gambling is launched in Pennsylvania. Parx Casino has also been following online gambling in neighboring New Jersey. They know it can not rely on these things alone, or they might suffer the same fate as Borgata.
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