Governor Chris Christie first buoyed the hopes of New Jersey legislators and residents when he called for the first year of online gambling in that state to raise $180 million in revenue and taxes. A number far removed from reality, according to industry analysts, that figure is not going to be met anytime soon. And though a five-month-old industry can hardly be chastised for not producing the kinds of numbers Christie was looking for, New Jersey has suffered its first revenue slump since Atlantic City online casino and poker gambling began back in late November of last year.
The first month over month revenue drop comes at a bad time for the state of New Jersey. Governor Christie recently stated that he was willing to cut pension funds to make up for any deficit in taxes. Calling Atlantic City casinos “crucial” to New Jersey’s financial rebound, Christie is unhappy with the failure of the web gambling operation in New Jersey to crank out massive numbers. However, the New Jersey casino industry had been under-performing year over year since 2006, and without the extra tax and fee revenue generated by the cyber casinos in the Garden State, those numbers would be worse still. Christie also mentioned that he is concerned the state’s credit rating may suffer if they do not find some way to generate more revenue.
The famous Atlantic City Boardwalk viewable from the oceanfront casinos which handle Internet gambling is no doubt poised to add tourist revenue to state coffers. This time of year is when Atlantic City begins to see an increase in tourist numbers and spending. Obviously, no one can predict what future numbers of a brand-new industry are going to be like, but currently, the state of New Jersey should receive about $12 million this fiscal year from the 15% online gaming tax which is in place. However, as the most populous state to offer legalized Internet gambling (larger than the combined populations of Nevada and Delaware by far), legislators had hoped for bigger revenue numbers. In April, a slight drop by $500,000 led to $11.4 million in revenue collected from online gambling in New Jersey.
That number is still more than 10 times larger than the $926,000 Nevada had in March, the most recent month which the Silver State has reported revenue. Delaware collected a paltry $207,000 from online gambling that same month. A major part of the problem is the continuation of US banks to decline New Jersey residents and visitors from placing online gambling deposits with their credit and debit cards. Even though the Department of Justice legislation called for each individual state to legalize or outlaw online gambling, and New Jersey chose to legalize it, many banks are not on board with cyber gambling transaction processing.
Also, the still infantile New Jersey online gambling industry has to fight established offshore websites which are legally certified to deliver a wide range of Internet gambling options to US and international citizens. Account sign up and funding is also much easier at these non-US operations which have been in business for years. To further illustrate the lack of blame which can be shouldered by the NJ Internet gambling industry, the state has missed budget revenue targets for three straight years. This is long before Internet gambling came to New Jersey, and as long as that state still holds a commanding lead in the growing United States online gambling market, Governor Chris Christie will have to point the finger of blame in another direction.