New Jersey's gambling industry experienced a significant shift last year.
Figures from the New Jersey Division of Gaming Enforcement show, that for the first time, gamblers lost more money to online platforms than to the physical casinos in Atlantic City.
This landmark year left a mark on New Jersey's gaming industry and set new records.
It's something we saw coming months ago. So, let's take a closer look at why 2025 was a landmark moment for New Jersey online casinos and its implications.
What Happened in 2025?
In 2025, New Jersey broke new ground in the gambling industry:
- The total "gaming win" from casinos, online gambling, and sports betting reached nearly $7 billion, marking the fifth consecutive record-breaking year for the state.
- Online casinos raked in approximately $2.91 billion, slightly surpassing the $2.89 billion win from Atlantic City’s physical casinos.
- December 2025 alone saw a remarkable $273.2 million generated from online gaming, indicating a stable and growing online market.
October surpassed the previous record of $248.4 million set in August, which topped another big month in September. So, the online casino revenue in New Jersey kept getting stronger as the year progressed.
Even as far back as August, when Caesars Entertainment launched Signature American Roulette in its online casino game in New Jersey, the numbers were trending upward.
New Jersey also passed a bill that bans sweepstakes casinos in The Garden State, creating less competition for legal online casinos.
Why This Milestone is Significant
This shift highlights a growing trend toward digital platforms:
- Online Surpasses Offline: For the first calendar year, online casinos exceeded the revenue of Atlantic City’s physical casinos. Previously, similar patterns emerged in individual months, like February and March 2025.
- A New Market Dynamic: Analysts labeled March 2025 a "watershed moment" as Internet gaming outperformed traditional casinos for consecutive months, setting the tone for future growth.
- Omni-Channel Market: New Jersey's shift underlines its transition to an omni-channel market, where growth primarily comes from online rather than traditional sources.
Why Aren't Casinos Celebrating?
Despite the record-breaking revenue, traditional casinos have reasons to be cautious:
- Revenue Distribution: A large portion of online and sports betting revenue goes to platform providers and technology suppliers, meaning the casinos keep less actual profit compared to in-house gambling.
- Impact on Physical Casinos: Online growth can potentially cannibalize revenue from on-site visits. It affects non-gaming income and the profitability of traditional casinos, as seen in the quarter three profits of 2025.
- Pressure on Profits: There is observed pressure on margins as profitable on-site visits decrease in favor of online gaming.
Implications for Atlantic City and Policy Makers
This digital shift carries long-term implications for both Atlantic City and state governance:
- Tourism Dependency: Atlantic City casinos must rely more on tourism, conventions, and non-gaming attractions, particularly during peak seasons.
- Focus on Online Channels: Revenue growth and tax collection are becoming increasingly reliant on online channels. State budgets are likely to prioritize the expanding tax base from iGaming and sports betting.
- Strategic Positioning: With online games leading the way, there’s a pressing need for strategic positioning among brands and platform partners to maintain a competitive edge.
The Competitive Landscape
New Jersey leads the way but faces competition and comparison from neighboring states:
- Pennsylvania: Expected to have annual gaming revenue surpassing $6.5 billion, with online gaming quickly approaching parity with physical casinos.
- Michigan: A more concentrated online market, though overall smaller than New Jersey, emphasizes how population and variety, not just physical space, drive growth.
New Jersey is setting the pace for an increasingly online-heavy gambling industry.
Observing its success offers a glimpse into potential developments in states like Pennsylvania and Michigan. As online casinos continue to outpace traditional gambling revenues, stakeholders are encouraged to adapt to this fast-evolving landscape.
With huge growth and new records, the future of gambling in New Jersey looks very promising. As the state keeps finding new ways to grow and offer more options, New Jersey stands out as a leader in gambling across the United States.
