Online Gambling May Create Less Revenue in New Jersey than Previously Anticipated

Governor Chris Christie and other New Jersey lawmakers hope to raise a considerable amount of revenue from online gambling. They were disappointed to hear a new estimate which suggests the state may generate considerably less revenue from online gambling than they originally expected.

Christie’s administration hoped that New Jersey would be able to generate at least $180 million after providing online gambling for one year. A new report from GamblingData.com, a company that studies trends in the online gambling industry, states that New Jersey would probably only generate about $40 million in revenue during its first year.

GamblingData made its estimates by comparing New Jersey’s industry model with European countries with regulated online gaming markets. They said that New Jersey will probably fare better than countries such as Italy which have large underground gaming markets. New Jersey’s regulations are expected to be much more favorable to online gaming providers so most companies will probably apply for the necessary licenses.

The news is also discouraging to the gaming providers who have recently received licenses to offer their services in the Garden State. PokerStars invested over $40 million purchasing the Atlantic Club Hotel and Casino to enter the newly regulated online gaming market. Gaming providers are also concerned about the growing competition in the state.

Gaming providers will be subject to a 15% tax on all gross revenues as long as they choose to invest in the Casino Reinvestment Development Authority. Those companies that choose not to invest 2.5% of their gross revenue to develop programs to discourage compulsory gambling would need to pay a 20% tax on all gross revenues instead.

This blog entry was posted on Wednesday, May 8th, 2013 at 9:47 pm and is filed under Blackjack News.