Following the closure of brick-and-mortar casinos in Pennsylvania, New York, and New Jersey, icasino revenue in New Jersey doubled. It caught the attention of Deutsche Bank Research analysts Carlo Santarelli and Steven Pizzella.
After observing an “interesting dynamic stemming from the tremendous growth experienced in icasino trends during the COVID-19 period,” the team recently published iCasino Musings & the Impact of iCasino on Traditional Casinos.
On an annual basis, New Jersey’s icasino GGR increased by 92% in the last year. In Pennsylvania, icasino GGR averaged around $10 million per month in the first seven months after its July 2019 launch.
The New Jersey market is highly seasonal; traditional casino GGR fell 17% in March and 9% in April compared to the previous year. In Pennsylvania, March fell 12%, and April grew 1% compared to the same months last year, figures that would “appear reasonable in isolation” but not in the context of the pandemic.
To compare states without icasinos, Deutsche Bank created a seven-state regional subset: Ohio, Iowa, Missouri, Louisiana, Indiana, Maryland, and Illinois. Compared to 2019, the regional subset increased by 2% in March and 19% in April. In March and April, same-store sales in New Jersey and Pennsylvania were down 20% and 9% from the previous year.
As a result, according to the analysts, “the presence of icasino in both New Jersey and Pennsylvania could be stunting their respective recoveries, especially given the overwhelmingly strong performance in other drive-to-market states.”
Moreover, Deutsche Bank says this makes “the theme of the pandemic making icasino legalization a good source of funds. It is far less likely now, post bailouts,” noting the lack of progress in icasino legislation in Indiana and Illinois. These states filed igaming bills in January and February of this year, respectively.