New Jersey Casinos Kick-start Online Public Gambling; Figures Disappoint

new-jersey-casinos-start-online-public-gamblingTwo months ago, regulators gave the go-ahead for six New Jersey casinos to begin offering gambling over the internet to patrons across the state, but recent figures have been well wide of projections, causing concern that the industry might be a non-starter without additional legislation and technical improvements.

Bally’s Atlantic City; the Borgata Hotel Casino & Spa; Caesars Atlantic City; the Tropicana Casino and Resort; the Trump Plaza Hotel, and the Trump Taj Mahal Casino were the first six venues to be approved.

There were initial teething problems when it came to technology behind the online systems, and a variety of different marketing attitudes, but there are now more than 150,000 accounts registered. It should be noted that individuals are likely to hold more than one account.

However, two weeks ago, the first lot of data was released by the state, which shows a disappointing trend for New Jersey’s gambling industry. Despite the extra income from the online offerings, year-on-year figures for gambling as a whole in December were down.

Online revenue for the first five weeks, including the soft launch, came in at $8.4 million, and had been predicted to boast a gross gaming yield of more than $10 million. The state forecast for the fiscal year was $1.2 billion. This is clearly far lower thanhad been hoped, even taking the soft launch and data into account, and despite increasing consumer sentiment.

Of the 8.4 figure, approximately 40 percent came from online poker.

Processing Issues

One of the major stumbling blocks for the online gambling industry is the processing of transactions. While the two major networks, Visa and MasterCard, will handle any legal gambling transaction, there are numerous card issuers and lenders that will not allow their customers to use plastic for such purposes.

American Express is one such lender, and maintains that the gambling industry accounts for a high number of customer service issues and credit problems. Several advocates have however suggested that the online industry is far less of a risk because of the sheer volume of data that must be submitted in order to hold an account.

Either way, there are widespread concerns that online gambling may be overly accessible, and it will be essential that companies demonstrate rigorous application processes.

Lawmakers Look Further Afield

Last week saw a bill introduced that aims to widen the reach of New Jersey’s online gambling companies. It would allow the current 15 sites to take bets from any state or country in which gambling is legal. As things stand the only other two states in which this would be possible are Delaware and Nevada, but internet gambling is widely available in Europe.

Perhaps more importantly, Sens. Ray Lesniak and Jim Whelan hope to improve the situation regarding transaction processing. If a licence is introduced for handlers, it’s hoped that credit institutions will be more inclined to allow their cards to be used for gambling.In theory this will hugely boost the number off account holders, particularly if combined with an expanded online reach. The global market is worth in the region of $30 billion.

It’s abundantly clear that online gambling in the state and the US as a whole has quite a way to go before it can actually be declared a success. The figures just don’t back up the forecasts yet, but that isn’t to say that the industry is dead in the water. Recent polls have shown that there is indeed interest, and with additional legislation, better marketing, and a wider audience, we could well see the online offering give gambling a major boost.

Adam Davies is a working Journalist and PR executive
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