Delaware and New Jersey online casinos, a tale of opposites in 2017

In March of 2017, online gambling in the state of Delaware has plummeted more than 40% despite neighboring New Jersey showing a 45% increase in profits while offering very similar experiences.  As the online gambling market in New Jersey continues to expand and mature, profits are quickly becoming a major part of the casino industry in the state, account for over 10% of all income earned by the casino in the state.

In the state of Delaware, however, officials and business leaders are scrambling to determine the cause of the rapid reduction in profits.  In some cases, individual online casinos are reporting a shift among games, with players moving towards games with smaller house advantages, while others are a point to weather as a cause.   In March of 2016, the weather was bad in Delaware resulting in more online gambling which made year over year comparison to March 2017 difficult because of better weather this year resulting in more people outside the home.

The gambling industry in Delaware is obviously not nearly as mature as New Jersey and the companies operating there do have the large backing of brick and mortar casinos so the rapid decline in profits in 2017 is a major concern for the long-term survivability of the industry.  Delaware currently has three companies operating online casinos in the state and the two largest reported huge drops in profits while only the smallest saw improvements mainly because of more offerings.

Before we declare a major problem, it is important to note that all three operators in Delaware are very profitable and overall gambling within the state has not decreased as much as the profits have.  Because these are relatively new businesses having only been in operation a few years, it will be interesting to see if it really was just the weather that causes a good 1Q 2016 and comparatively bad 1Q 2017 or if the problem is more fundamental.