High Hope for NJ iGaming in 2014
We are less than three weeks into 2014, but already officials in the state of New Jersey are betting that the new year is going to be a very big one indeed for the state’s brand new real money online betting business.
This week Bloomberg Businessweek ran a story in which it reported that despite the fact that thus far, revenue derived from the state’s iGaming business has failed to top, or even come close to meeting, the expectations lined out by state gaming regulators, casino heads, and the now scandal-ridden governor, Republican Chris Christie, most parties involved in the state’s online wagering industry expect 2014 to deal the industry a lucky hand.
Revenue just tops $8 million for end of 2013
Real money online casino and poker sites launched in New Jersey in late November of 2013.
According to Bloomberg, the revenue generated by those sites, which are legally tied to the land-based casino industry in Atlantic City in that all online operators must be partnered with a brick and mortar casino property in the city, from the time of the launch through the end of the year came in at $8.4 million.
Extrapolating those numbers over the course of a year – assuming they remain completely static – puts New Jersey’s annual Internet gambling revenue at under $100 million.
By contrast, the state’s casino industry, Governor Christie, and others, have long talked up the Garden State’s iGaming market at having the potential to net anywhere from $200 million to $300 million per year.
In the months running up the commencement of the industry, some analysts pegged the figure even higher, with far outside estimates coming in at a possible $1 billion.
Of course, the market is unlikely to remain completely static, with operators constantly coming up with new tie-ins, marketing deals, and promotions, such as the arrangement announced last week that sees Party Poker NJ joining forces with the New Jersey Devils, the Prudential Center, and the Philadelphia 76ers.
Land-based casinos continue to struggle
Online gambling has been a beacon of hope for the Garden State for nearly a year – ever since New Jersey became the third, and by far the most populous, state to pass a measure to allow residents and visitors to access real money online casino and online poker web sites.
Meanwhile, the land-based casino industry in what was once considered to be the most flourishing U.S. gambling market outside of Nevada continues to slide. Casino revenue has been on the decline since it peaked back in 2006, and has dipped further and further with each intervening year.
Competition from other eastern states remains high, and will increase more
Largely to blame is the fact that competition for gamblers and their disposable cash – particularly from the neighboring state of Pennsylvania – has increased considerably over the last few years. With many states still struggling in the wake of the debasement of tax revenue because of the recession and continued weak economy, adding casino properties has been the solution to which many have turned.
This has spelled disaster for Atlantic City, which faces even stiffer competition in light of the recent passage of a constitutional amendment in New York, long a key state from which New Jersey’s casino industry has drawn its customers, that will eventually allow for the construction of seven new land-based casinos there.
No casinos are planned for New York City for a number of years; the first wave of new brick and mortar casinos in New York will be sited in the upstate part of the state, a reality that already has Pennsylvania worried about a drop off of its own.
