By Christie Duffy
Online gaming in New Jersey was supposed to bring in big bucks for the state.
But the results haven’t lived up to the promise.
Since March, internet gaming revenue has been on the decline.
The amount of tax money it’s earning for the state is also falling short of expectations. When online gambling was about to launch, Sen. Raymond Lesniak, a key sponsor behind the bill that brought online gambling to our state, estimated it would generate about $100 million in tax revenue. Six months in, the state has collected $9.3 million. The state treasury’s most recent estimate is for $19 million.
“They are even down from what I estimated they would be. But this is a long term situation where this is a new form of gambling we are introducing to New Jersey,” Lesniak said.
While would-be online gamblers may run into hurdles like we did today — error messages, downloading plug-ins, verifying we were in fact gambling from the state of New Jersey — Lesniak says it’s the big banks that are stacking the deck against online gaming growth.
“They’re not returning the revenues mostly because the banks in the U.S. are not allowing their credit cards to be used,” Lesniak said.
Some financial institutions, including Bank of America and Chase Card Services, confirmed to NJTV News that they do not allow internet gaming purchases. None of the banks we contacted today would answer why.
“I think it’s a learning curve for the financial institutions, to learn that this activity is perfectly legal,” said Israel Posner, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Richard Stockton College of New Jersey.
Posner says some institutions are also charging added interest for online gambling, treating purchases as cash advances, which can carry a hefty interest rate, compared to standard purchases.
Posner says the industry could offset that consumer cost by offering vouchers for free play.
“I think the more challenging issue at this point that is inhibiting rapid growth is the availability of content or exciting games,” Posner said.
“It will start going if we keep continuing to make it more convenient for folks play what they like to play now offshore and illegally, to play poker for instance if they want to,” Lesniak said.
So far more than 350,000 New Jerseysans have signed up to gamble online.
Proponents believe it will take three to five years for this market to reach full maturity.