Takeaways from NJ DGE’s Achievements and Goals Letter

Steve Ruddock January 7, 2015 1097 Reads

The New Jersey Division of Gaming Enforcement (NJ DGE) has been surprisingly transparent when it comes to online gambling, providing the iGaming press official statements, quick responses to questions, interviews, and even offers of access to their headquarters.

I think I speak for everyone who covers the iGaming industry when I say the access and information the DGE has provided us over the past year is extremely appreciated.

On Monday the NJ DGE continued this trend of transparency, releasing a 9-page letter highlighting the “achievements to date and goals for the future” of the state’s online gambling industry.

Most of the information contained in the letter is a rehashing of earlier press releases and data, but the DGE letter did reveal/clarify some information and data that up until now analysts had been cobbling together from different sources, such as specific credit card success rates and geolocation accuracy.

The most interesting parts of the announcement come towards the end, when DGE chief David Rebuck lays out what the Division has in store for New Jersey online gambling in 2015, and even further down the road.

Here are the highlights from the letter.

Statistics

By the beginning of the soft play period on November 21st, 2013, the DGE’s “slot lab tested and approved 253 games for play on a total of 16 authorized URL’s.” The number of approved games has now grown 423.

On November 27, 2013 there were a total of 32,319 accounts created between the state’s online operators. The number of accounts created a year later stands at 506,172. It should be noted these are not unique accounts, as players can have accounts at multiple iGaming sites in New Jersey.

Geolocation success rates have risen to roughly 98% according to the DGE.

The Division of Gaming Enforcement lists payment processing success rates as: 73% for Visa and 44% for MasterCard. These two numbers at first seem to be transposed based on prior data, which indicated MasterCard’s success rates were far higher than Visa’s. However, site’s have been steering players away from Visa transactions, while MasterCard use has remained high, which could account for the change.

75% of all iGaming revenue comes from online casino and just 25% from online poker. However, not all operators offer online poker, and among the operators that offer online poker the revenue split is 60/40 in favor of casino games.

In addition to licensing fees and taxes, regulations mandate all Internet gaming operators pay $250,000 each year to the state. This money is used to help fund problem gambling initiatives.

Payment processing

The letter also mentions that a new credit card code has been created for legal online gambling transactions – to replace the current 7995 code used to designate all gambling – and is expected to be in effect by the spring of 2015.

It should be noted that this doesn’t mean credit card companies will suddenly accept gaming transactions – that decision will still be up to each individual bank to make. The new code simply gives these banks a better reason to accept legal online gambling transactions, as does the DGE’s statement that, “the rate of chargebacks for Internet gaming is actually less than it is for retail transactions.”

Taken together these are a powerful argument which could persuade banks to process legal online gaming transactions in New Jersey. As the DGE notes, “as the banking industry becomes more familiar with legalized Internet gaming and patrons become more educated about the various options for funding their accounts, further improvements are expected in this area.”

Fraud Detection

Offering even more cover to banks, the DGE also hyped their fraud detection methods, citing the case of Diana Zolla, who was arrested on April 30, 2014, by New Jersey State Police and charged with theft by deception, after claiming someone stole her identity and racked up a $10,00 online gambling bill.

The investigation revealed she had actually made the charges herself according to the DGE.

Responsible Gambling

Keith Whyte, head of the National Council for Compulsive Gambling, stated that New Jersey, “by far had the most comprehensive responsible gaming policies of all the states with authorized Internet gaming.”

In addition to the $250k set aside per operator for problem gambling initiatives, “New Jersey statute N.J.S.A 5:12-95.18 requires a study to be published on an annual basis to review the impact of Internet gaming in New Jersey.”

Rutgers University will be producing the annual reports, along with long-term research on the impact of online gambling in the Garden State. As part of the report Rutgers will have access to non-sensitive data provided by the online operators in the state.

Interstate and International

The most attention grabbing section of the DGE’s letter was the following passage:

“The legislation that authorized Internet gaming specifically permits the Division to enter into multi-jurisdictional agreements. The Division has been in discussions with other jurisdictions, such as Nevada and the United Kingdom, but no compacts have been entered to date. The Division is open to discussions in this area and always seeks to ensure that any agreements are most beneficial to New Jersey’s Internet gaming industry.”

Based on this statement, interstate, and potentially international compacts could be in New Jersey’s future.

Official seal on the way

Another interesting tidbit in the document was the creation and implementation of an “approved Division seal for use on New Jersey’s authorized websites.”

The lack of differentiation between legal and illegal has been pointed out by several poker columnists and pundits, and an official, easily recognizable seal is a small, but necessary step in correcting this issue.

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