NJ Online Gamblers To Reach 600,000 by End Of 2014

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Tuesday, February 18th, 2014 | Written by Stephen Smith

New Jersey’s online gaming market could triple by the year’s end from its current level of almost 200,000 accounts, according to a recent poll conducted by Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism. A total of 2.5% of the people surveyed said they had already gambled on NJ sites since legalization was introduced in November, but a further 7% said they intended to do so this year.

Big plans for New Jersey online gambling

In January, New Jersey’s online gambling revenue was up 28% to $9.5 million, compared to the $7.4 million generated in December, 2013. Although the state’s fledgling online gambling industry has got off to a fairly slow start in terms of revenue, by the end of last month 197,782 online gambling accounts had been created out of a state total population of almost 9 million people.

Those figures are encouraging gaming industry officials, especially as New Jersey is hoping to eventually attract additional players from other states and possibly from other countries, thus securing greater access to a global online gaming market currently estimated to be worth $33 billion. In fact, State Senator Ray Lesniak (D-NJ) has already introduced bill S980, supported by fellow State Sen. Jim Whelan, designed to widen New Jersey’s player base, whilst possibly turning the state into a licensing agency, such as Gibraltar, Isle of Man, and Malta.

“Instead of being in Gibraltar or the Isle of Man, some online gaming companies will rather operate out of Atlantic City and be at the hub of an Internet gaming operation. Our regulatory system is more stable. Strange as this may sound, our political system is more stable, too,” explained Global Gaming Business Magazine publisher, Roger Gros.

Bill S980’s synopsis is that it would: “Authorize permits for certain New Jersey casinos for interstate and foreign Internet wagering; requires Internet gaming payment processors be licensed as casino service industry enterprises.”

On the other hand, if NJ internet wagering stays restricted to just state residents, it is likely become a $266 million annual industry, according to Econsult Solutions senior economist, Adam Ozimek.

Offshore sites pushed out of NJ market

Up until April 15, 2011, big brand operators such as PokerStars and Full Tilt enjoyed a dominant position in the USA’s unregulated internet gaming market, but after the DoJ ruled they had violated the UIGEA of 2006, these gambling websites were forced to pull out of the American market. Since then Nevada, Delaware, then New Jersey legalized their domestic internet gambling markets, paving the way for greater competition and fresh opportunities for other gambling brands to enter the business. As Rich Muny, Poker Players Alliance VP of player relations, explains:

“The offshore sites aren’t big names anymore. We’re really seeing them get pushed out of the marketplace by the licensed and regulated games, as it should be. We would all rather play on the domestic sites because it benefits us as consumers. Now a disgruntled player can go to a regulator if there’s a dispute with the site over billing or any issue.”

Furthermore, with a state tax of 15% levied on online gambling revenue, as opposed to the 8% for brick-and-mortar casinos, New Jersey is hoping to add millions of extra dollars to the state’s cash strapped coffers, as well as attracting an estimated 16,000 high-tech jobs to the state.

Online wagering a life-line to NJ’s ailing gambling market

Gambling has a long legacy in ‘The Garden State’ but by 2012 neighboring Pennsylvania, which opened its first casino in 2006, replaced New Jersey as the country’s second-largest casino market behind Nevada. Compounding the problem, in 2013 Atlantic City’s casino revenues dipped below the $3 billion mark for the first time in 22 years, as it faced greater competition from nearby states, including New York, Maryland, Delaware, and of course, Pennsylvania, which now has 12 casinos.

Consequently, online gambling, and particularly online poker is seen as a way of reviving New Jersey’s ailing gambling market on its way to reclaiming former glory. Prior to New Jersey introducing regulated online gaming, it is believed online poker helped revive the game in land based casinos, particularly in Las Vegas and New Jersey.

Now, online poker is helping to attract more players to the state, whilst encouraging them to stay longer. Casing point, Ohio poker pro Brandon Shane, 28, said although he usually travels to Atlantic City’s Borgata casino to play in its poker tournaments, recently he came earlier so that he could enter a couple of online tournaments on www.wsop.com.

Highlighting the potential importance of regulated online gambling to the gambling industry in general, Poker Players Alliance VP of player relations, Rich Muny, commented: “Online poker really brought that excitement and spark back into the game. Also, now that online poker is licensed, you can actually cross market. I’m at Harrah’s right now and there’s an ad inviting me to play on their website.”