In 2013, New Jersey became one of the first states to legalize online gambling, hoping to rescue Atlantic City’s struggling casinos. Lawmakers promised jobs, tax revenue, and a safe, regulated alternative to offshore gambling sites.
But more than a decade later, the reality isn’t as rosy. Yes, online casinos have boomed, but so have problem gambling, tax revenue shortfalls, data breaches, and fraud. Meanwhile, Atlantic City’s casinos continue to decline, raising the question:
Did New Jersey fix its gambling problem—or just create new ones?
Online Gambling in New Jersey: A Look Back Into History
Until 2006 – The Rise of Atlantic City Casinos
In 1978, Atlantic City became the only place outside Nevada with legal casinos. Resorts Casino was the first one to open, and by the 1980s and 1990s, the city had become a major tourist destination.
At its peak in 2006, Atlantic City casinos pulled in a record $5.2 billion in revenue, making it the second-largest gambling destination in the U.S. after Las Vegas.
After 2006 – The Fall of Atlantic City Casinos
Unfortunately, the golden era didn’t last long. Starting in 2006, neighboring states like Pennsylvania and New York began legalizing casinos of their own, taking away New Jersey’s gamblers. Atlantic City’s revenue plummeted by over 40%, and by 2012, it had dropped to just over $3 billion. Multiple casinos shut down, turning parts of the city into a ghost town.
In a desperate attempt to stop the financial bleeding, New Jersey turned to online gambling, hoping to make up for some of the lost revenue and keep players from leaving to neighboring states and offshore sites. But as it turned out, online casino and sports betting legalization was a gamble within a gamble—and one that came with long-term consequences.
2013 – New Jersey Legalized Online Gambling
With Atlantic City’s future on the ropes, New Jersey became the third U.S. state to legalize online gambling in 2013, following Delaware and Nevada. The law allowed Atlantic City casinos to partner with online operators, offering casino games and poker regulated by the New Jersey Division of Gaming Enforcement (DGE).
While the move temporarily boosted revenues, it failed to revive Atlantic City itself. In its first full year of operation (2014), online gambling brought in $123 million, growing to $149 million by 2015. Still, this wasn’t enough to save the city’s land-based casinos, which continued to struggle.
2018 – New Jersey Legalized Sports Betting
The final nail in the coffin for Atlantic City’s monopoly came in 2018, when the U.S. Supreme Court struck down PASPA, allowing states to legalize sports betting. New Jersey was quick to act, launching both retail and online sportsbooks within weeks of the ruling.
The first legal bets were placed on June 14, 2018, at Monmouth Park Racetrack and the Borgata Casino in Atlantic City, which was the start of an explosion of sports gambling in New Jersey. In 2019 alone, bettors placed over $4.5 billion in wagers, generating around $299 million in revenue. By 2023, the total handle had surged past $11 billion annually, with revenues exceeding $1 billion. But at what cost?
Can Land-Based Casinos and Online Gambling Sites Co-Exist?
The short answer? Not really.
While online platforms have made millions of dollars, they have fundamentally changed the online gambling and sports betting industry in New Jersey. Online gambling supporters claim it’s just another way for people to play, but the numbers tell a different story. Instead of saving Atlantic City, online gambling seems to have only sped up its decline.
Atlantic City’s casino workforce has shrunk and once-iconic properties continue to struggle or shut down. Fewer people walk through casino doors, and with lower operating costs, online gambling sites have little to no incentive to prop up the struggling Atlantic City economy.
The New Jersey Division of Gaming Enforcement has confirmed that online gambling has not revitalized Atlantic City—it has simply moved the money elsewhere.
In October 2024, for the first time ever, New Jersey’s online gambling revenue hit $213.6 million, surpassing the $208.7 million earned by Atlantic City’s physical casinos. So, even as online casinos set new records, most Atlantic City casinos still struggle to reach pre-pandemic levels.
The Other Side of The Story – Are They Right?
Some insist that online casinos aren’t hurting Atlantic City—that they’re actually helping. Jane Bokunewicz, faculty director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University, argues that online gambling is just another way to play, not a replacement for the casino floor.
Supporters of this idea point to August 2024, when Atlantic City’s retail casinos pulled in $294 million, their third-best month since 2016. In the same period, online gambling brought in $198.4 million, making it seem like both sectors can thrive together.
Another study by Eilers & Krejcik Gaming (EKG) backs this up, claiming that online gambling boosts land-based casino revenues by an average of 2.44% per quarter.
At first glance, the argument seems solid. But when you dig deeper, the cracks start to show.
The Harms of Online Gambling in New Jersey
Sure, online gambling has pumped millions into New Jersey’s economy, but let’s not pretend it’s all free money. Unlike a trip to Atlantic City, where gambling requires effort and planning, placing bets from a smartphone takes just a few seconds. And that’s exactly the problem. Gambling is now easier and riskier than ever, creating serious consequences for individuals and the broader community.
Economic Downturn: A Losing Bet for New Jersey
When it comes to tax revenues, online gambling may be doing more harm than good to New Jersey’s economy. A 2024 study by NERA Economic Consulting revealed that, despite $2.4 billion being spent on online gambling in 2022, the state’s overall economic activity actually declined by $180 million.
Why? Because online gambling is a high-margin, low-labor industry. Unlike Atlantic City casinos, which support thousands of jobs and bring in tourism dollars, online platforms operate with a skeleton crew. There’s no hotel spending, no restaurant bills, no bar tabs—just money flowing straight from gamblers’ pockets into corporate profits.
So, if online gambling was supposed to support New Jersey’s economy, why is it pulling money out instead?
Problem Gambling: Addiction at Your Fingertips
The numbers don’t lie—gambling addiction is skyrocketing. The Council on Compulsive Gambling of New Jersey reported a 277% spike in calls to their helpline since the 2018 sports gambling legalization. And it’s not just anyone making those calls—it’s young adults.
That’s the reality of online casinos and gambling on sports—there’s no pit boss watching your bets, no cash withdrawals to slow you down, no physical barriers between you and your worst decisions. It’s just you and the app.
The damage doesn’t stop at the wallet. Problem gambling has been linked to increased healthcare costs, higher homelessness rates, and rising crime levels. Analysts estimate that the social costs associated with gambling addiction could reach $350 million, almost wiping out the tax revenue that online gambling supposedly generates.
Youth Gambling: A New Generation of Problem Gamblers
Studies show that children exposed to frequent gambling advertisements are far more likely to gamble as adults. Even worse? Many underage players are already finding ways around age restrictions—whether it’s using a parent’s account or finding loopholes in verification systems.
New Jersey’s own data has flagged this as a problem, with reports warning that young adults are gambling earlier and more frequently than ever before.
Today, it’s much easier for young people to get hooked on sports betting. Micro-betting, in-game wagers, and social media promotions have turned it into a constant habit, making it feel as natural as checking Instagram or TikTok.
Legal and Ethical Issues: The Dark Side of Online Betting
Online platforms have made it easier than ever for people to cross the line. For example, take this case from New Jersey: a man stole nearly $1 million from his own family to fuel his gambling addiction on DraftKings. His wife had no idea until their entire savings were gone.
This isn’t some rare case—it’s part of a bigger problem. Stories like this are popping up everywhere, with more cases of identity theft, fraud, and gambling-related crimes tied to online gambling.
And let’s not forget about data security risks. Players are handing over their personal and financial information to these platforms, trusting that they’re secure. But as cybercrime increases, how long before these sites become prime targets for hackers?
Online Gambling Revenues: New Jersey Keeps Setting New Records
There’s no denying it—New Jersey’s online gambling industry is a money-making machine. Since 2013, the state has collected billions in tax revenue, with new records being set almost every year. In November 2024, the state set another record, pulling in $214 million in online gambling revenue—the highest ever.
But here’s the problem: while these numbers look impressive, most of the profits don’t go to the state—they go straight to corporate gambling operators.
How That Money Might Be Better Spent in the State?
New Jersey’s cut from online gambling is undeniably huge, but is it being used effectively? A large portion goes toward Atlantic City revitalization and senior programs, but there’s growing debate about whether it could be better spent.
What if, instead of propping up a struggling casino industry, those funds went toward education, healthcare, or infrastructure? What if New Jersey invested those billions of dollars into diversifying its economy, rather than doubling down on gambling? These are the real questions policymakers should be asking themselves.
Closing Thoughts: Online Gambling is Killing Atlantic City
Think about it—why would anyone drive to Atlantic City, book a hotel, and spend money on restaurants and entertainment when they can just gamble from their couch?
Online casinos cut out all the extra spending that keeps land-based casinos alive. The restaurants? The hotels? The shopping? Gone.
Some argue that land-based and online gambling can co-exist, but the reality says otherwise. Atlantic City’s casinos aren’t just competing with each other—they’re competing with thousands of gambling apps that are faster, more convenient, and always open.
The more people bet online, the fewer walk through casino doors. Revenue may be up, but at what cost? Fewer jobs. Fewer tourists. A weaker Atlantic City.
Online Gambling in New Jersey – FAQs
When was sports betting legalized in New Jersey?
Sports betting became legal in New Jersey on June 14, 2018, following the downturn of PASPA. New Jersey was one of the first states to act, launching both retail and online sportsbooks within weeks.
When did sports betting become legal across the U.S.?
Sports betting became legal across the U.S. in May 2018, following the Supreme Court’s decision to strike down PASPA (the Professional and Amateur Sports Protection Act).
When did online gambling become legal in New Jersey?
Online gambling became legal in New Jersey in 2013, making it one of the first states to regulate online casino games and poker, under the supervision of the DGE.
