While New Jersey Governor Chris Christie continues to assert that online gambling revenues for the 2014 fiscal year will result in upwards of $160 million in tax revenue, many local lawmakers and analysts strongly disagree.
The Christie administration has thrown its weight behind predictions which place Internet gaming revenues at up to $1 billion in the fiscal year. Taxed at 15%, the state would stand to gain $180 million in tax revenue, although this figure was later lowered slightly.
“From the get-go, we thought the number was, frankly, absurd,” state Sen. Jim Whelan told the Atlantic City press. “I never thought the state was going to hit the mark, even the revised mark. Both of those numbers are unrealistically optimistic.”
Whelan, who is an advocate for online gaming, thinks that hitting the governor’s projected numbers before the end of the fiscal year will be impossible. He estimates that tax revenue from this year’s iGaming industry will generate well under $100 million.
Ratings agencies such as Moody’s Investors Service agree with the senator, predicting that online gambling revenues would total between $250 million and $500 million, less than half of Christie’s prediction. Another agency, Fitch Ratings, believes even that estimate to be high, suggesting that the industry would bring a maximum of $300 million in a year.
A report produced by Fitch takes some of the luster off of Christie’s optimistic outlook: “Although some market participants will benefit, New Jersey online gambling is not going to be the savior of the (Atlantic City) casino market,” it says. The report even suggests that Internet gambling will be harmful to the market, saying that, “In some ways, it will be detrimental because it has kept brick-and-mortar supply in the market when the level of demand dictates that some supply should be removed.”
New Jersey allowed online gambling operators to open to the public on November 26 after licensed casinos completed a five-day soft launch trial period. At the moment, six of the city’s 12 casinos are involved in online gaming, while others remain in limbo awaiting licenses from state regulators.