Online gambling is now permitted in New Jersey. Viewed as a worthy development in the casino world by gambling analysts, the decision has been made based on a premonition of the existence of unexploited revenue sources in electronic device users.
In addition to New Jersey, eight other states also have legislation pending that would allow Internet gambling. While Delaware and Nevada were allowed online gambling earlier this year, lifting the ban in New Jersey was the most anticipated move because it means the offering of a wider variety of casino games besides poker. The state’s large and diverse population can be considered a test subject in determining whether or not online gambling will appeal to a younger, more Internet-ready demographic while allowing existing casinos to maintain their own consumer base.
Gov. Chris Christie signed the legislation allowing Internet gambling this year with the anticipation that it would generate $1 billion for New Jersey casinos in its first year, bringing in $150 million in tax revenue to help balance the state budget. Ratings agencies and gambling industry analysts, however, cited that the estimate was hugely inflated; one forecaster, H2 Gambling Capital, predicted that online gambling will produce about $300 million for New Jersey casinos — or about $45 million in tax revenue. But H2 Gambling Capital estimated that should larger states (California, for instance) also lift the ban on online gambling, the market in the United States could be worth about $9 billion in the next five years.
Analysts aren’t only focused on how New Jersey fares in generating the revenue, but also the reliability of new technology in ensuring that bets are placed by persons within state lines who are older than 21, as the legislation requires. There is also concern about the prevalence of gambling addiction with the ease of access to the casino games brought about by the Internet.
Some fear that Tuesday’s official debut marked the start of what may well lead to a political fight. Legislators are already lobbying for the allowance of international companies to operate in New Jersey (current law allows Internet gambling only through a limited number of casinos); one of several other possible repercussions lifting the ban may have sparked in NJ.
President of the American Gaming Association, Geoff Freeman, acknowledges the fact that the Internet is a revolutionary force for all business industries, one that should be harnessed and used to benefit the population. Online gambling execs note that persons are already accessing the service illegally, and it would therefore make sense that it should be tapped for profit and tax revenues, and regulated to protect players.
Seven casinos gained approval for a ‘soft launch’ that began last week, with a trial offered to invited guests. State gaming officials were taken aback at the volume of acceptances they received; about 10,000 persons agreed to be involved.
NJ representatives and casinos employed testers outside the state to prove that the technology used will ensure that bets come only from within New Jersey. None of those testers were successful in breaking through, although casinos said some others did. Other NJ gamblers attempted to access the sites, but were unsuccessful. And some banks and credit card companies blocked customers from getting access.
Until Congress passed a law to prevent gambling companies from accepting bets online for what is deemed as ‘unlawful’ transactions, gambling online was widely accepted in the United States from the late 1990s until 2006. Many companies subsequently left the market when the law was passed, leaving less well-regulated operators that in several cases turned out to be laundering money. The Department of Justice prosecuted three online poker company heads to this end in early 2011. Later that same year, however, another ruling was issued making only sports bets unlawful. States, already in a fierce competition for casino customers, moved quickly to take advantage of the new market.
In addition to New Jersey, eight other states also have legislation pending that would allow Internet gambling. While Delaware and Nevada were allowed online gambling earlier this year, lifting the ban in New Jersey was the most anticipated move because it means the offering of a wider variety of casino games besides poker. The state’s large and diverse population can be considered a test subject in determining whether or not online gambling will appeal to a younger, more Internet-ready demographic while allowing existing casinos to maintain their own consumer base.
Gov. Chris Christie signed the legislation allowing Internet gambling this year with the anticipation that it would generate $1 billion for New Jersey casinos in its first year, bringing in $150 million in tax revenue to help balance the state budget. Ratings agencies and gambling industry analysts, however, cited that the estimate was hugely inflated; one forecaster, H2 Gambling Capital, predicted that online gambling will produce about $300 million for New Jersey casinos — or about $45 million in tax revenue. But H2 Gambling Capital estimated that should larger states (California, for instance) also lift the ban on online gambling, the market in the United States could be worth about $9 billion in the next five years.
Analysts aren’t only focused on how New Jersey fares in generating the revenue, but also the reliability of new technology in ensuring that bets are placed by persons within state lines who are older than 21, as the legislation requires. There is also concern about the prevalence of gambling addiction with the ease of access to the casino games brought about by the Internet.
Some fear that Tuesday’s official debut marked the start of what may well lead to a political fight. Legislators are already lobbying for the allowance of international companies to operate in New Jersey (current law allows Internet gambling only through a limited number of casinos); one of several other possible repercussions lifting the ban may have sparked in NJ.
President of the American Gaming Association, Geoff Freeman, acknowledges the fact that the Internet is a revolutionary force for all business industries, one that should be harnessed and used to benefit the population. Online gambling execs note that persons are already accessing the service illegally, and it would therefore make sense that it should be tapped for profit and tax revenues, and regulated to protect players.
Seven casinos gained approval for a ‘soft launch’ that began last week, with a trial offered to invited guests. State gaming officials were taken aback at the volume of acceptances they received; about 10,000 persons agreed to be involved.
NJ representatives and casinos employed testers outside the state to prove that the technology used will ensure that bets come only from within New Jersey. None of those testers were successful in breaking through, although casinos said some others did. Other NJ gamblers attempted to access the sites, but were unsuccessful. And some banks and credit card companies blocked customers from getting access.
Until Congress passed a law to prevent gambling companies from accepting bets online for what is deemed as ‘unlawful’ transactions, gambling online was widely accepted in the United States from the late 1990s until 2006. Many companies subsequently left the market when the law was passed, leaving less well-regulated operators that in several cases turned out to be laundering money. The Department of Justice prosecuted three online poker company heads to this end in early 2011. Later that same year, however, another ruling was issued making only sports bets unlawful. States, already in a fierce competition for casino customers, moved quickly to take advantage of the new market.