On the desk of NJ Gov. Chris Christie, sits legislation that would open online gaming throughout the state. Working profusely to make it this far, lawmakers sit back and wait in anticipation of the governor?s decision, in what analysts suggest is the last chance of revival for the Gambling Capital of the East Coast.
Wells Fargo analyst, Dennis Farrell estimates that online gambling would boost AC gaming revenues by $650m to $850m in its first year. He rejected the notion that online betting would cause a detrimental affect to the casino industry.
?Opponents of the bill believe online gaming will lead to job losses at brick-and-mortar casinos,? Farrell wrote in a report on the bill, ?We beg to differ, as we believe online gaming sites operated by state operators will lead to job creation and drive visitation to Atlantic City.?
The gaming industry has been in steep decline since 2006 and overtaken by Pennsylvania in terms of gaming revenue last year, analysts fear the market could continue to slip as more casinos open in neighbouring states. As well a fresh tax stream, analysts suggest that opening the market at this stage will have an advantage to potentially run operations in neighbouring states late to the game.
Under the measure, online casinos would be available to players state-wide and be operated by casino companies doing business in Atlantic City. To stay competitive with Nevada?s 7 percent gambling tax, the legislation proposes a 10 percent rate to help entice internet gaming companies to setup in the state. Legalised sports betting signed into law last year could also stir increased interest of gaming in the state.
?In our opinion, this is one of the last chances the governor has to provide a lifeline to Atlantic City casinos,? suggested Farrell, ?The size of the online market could be almost half of the existing New Jersey gaming market?s revenue.? This would result in an additional $1.5bn in casino revenue and $150m in new tax revenue each year.
Casino companies would have an instant competitive advantage over neighbouring states, such as Pennsylvania and Maryland, which have been siphoning its customers over the last several years. Domestic brands such as Caesars, Golden Nugget and Bally?s could cross-market their offerings whilst promoting their land-based venues through increased brand presence online.
Christie vetoed a similar law in 2011, but it has since undergone a series of amendments. Reforms made to the bill would prevent advertising and limits only Atlantic City casino businesses to offer online gaming. This resolves the governor?s concerns over a rise of unlicensed operations appearing in the state.
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