Governor Christie’s Projections Came up $166 Million Short
A few months after New Jersey online casinos and pokers sites launched, it’s obvious that Governor Chris Christie’s projections on tax revenues were inaccurate. While trying to gain approval for regulated online betting in New Jersey, Gov. Christie estimated the state would bring in $200 million in the first year.
Those projections are now closer to $34 million for the fiscal year. Since the fiscal year ends on June 30, the $34 million total is not an indication of what New Jersey expects to collect in revenues in a standard year. Still, next year’s budget projections estimate a $55 million increase in revenue, still far short of the originally anticipated amounts.
Several New Jersey politicians are on the record saying they had less ambitious expectations at the time. After Christie’s initial statements, New Jersey State Treasurer Andrew Sidamon-Eristoff corrected the projected numbers down to $160 million in the first fiscal year. Though this was still way beyond realistic expectations, it does indicate officials under Christie had more sober appraisals.
Raymond Lesniak Says He Expected These Numbers
State Senator Raymond Lesniak, a Democrat from Union, was the most vocal supporter of the online gambling legislation in the months before it was passed into law. Lesniak says the current numbers are close to his own personal projections. Lesniak also states he made his own opinions known to Governor Christie’s office at the time.
Senator Lesniak says he imagined a number closer to $60 million for the first year, given the fact online gambling communities take a while to build. The fact the new gaming sites would start work 5 months into fiscal year also had a major bearing on his projections.
When asked for a comment on the most recent statistics and how they fall short of Christie’s stated goals, Lesniak said, “The governor just ignored those sensible economic thoughts. He totally threw them out the window.” While it’s expected a politician from one party is going to be criticize politicians from the other party, many gambling analysts had similar expectations to Lesniak’s numbers. Even the experts appear to have been surprised by the relatively flat numbers after the rollout.
Atlantic City’s Expected Boost
Many people inside and outside of the state government have hoped licensed and regulated online gambling would be the saving grace for Atlantic City casinos. Since 2006, Atlantic City has seen declining numbers as competition in nearby states has slowed the tourist visits to the Boardwalk.
In Pennsylvania, laws were changed to allow gaming machines at Pennsylvanian racetracks, creating so-called racinos. Many Pennysylvanian gamblers have gone to game at the horse racing parks in their own state, instead of Atlantic City. The massive Native American casinos in Connecticut (Mohegan Sun and Foxwoods) continue to present competition for New Yorkers, while online gambling has kept some gamblers at home who would otherwise venture to east coast’s biggest gambling city.
The fact Atlantic City casinos cannot operate sports books also has hurt their operations. Governor Christie threatened to defy federal law in allowing sports betting in his state, but nothing ever came of the plan. Making matters worse is the lack of legal sports gambling is the fault of New Jersey lawmakers of the early 1990’s, when the U.S. federal government gave several states a one-year window to legalize sports gambling in their states–and New Jersey was the only one of those states which didn’t act to seize that opportunity. For the first time in 22 years, combined revenues for the casinos was lower than $3 billion.
Online Gambling Part of the Solution
With so many trends against the Boardwalk casinos, politicians like Gov. Christie and State Senator Lesniak were looking to online casinos and card rooms to reverse the trend and bolster the twelve (now eleven) casinos in Atlantic City. While these operations should continue to build revenue streams, it’s not likely to be anywhere near where the projections originally were.
Gene Johnson, Spectrum Gaming Group’s SVP for market researching and online studies, recognized the lackluster beginning, but says the full story hasn’t unfolded. Johnson said, “For all of those reasons, the rollout has been slower than anticipated and the resulting revenue has been lower than projections. It’s going to be very interesting to see how it plays out.”
Still, the land-based casinos have replaced some of the revenue that had been lost in recent years. While the regulated online gambling law might not be the full answer to Atlantic City’s problems, it appears to be part of the answer. The number should continue to rise, even if they never reach the numbers many had hoped. One poll conducted of New Jersey gamblers showed that 7% of the land-based betters who haven’t signed up for online gambling plan to do so in the next year.
