Despite skepticism from lawmakers and budget experts, the state treasurer is standing behind his estimate that Internet gambling could net Atlantic City casinos $1.2 billion during its first year of operation.

Treasurer Andrew Sidamon-Eristoff said Wednesday in a letter sent to legislative budget chief David Rosen that the estimates were based on a report from a Wells Fargo analyst who projected New Jersey’s Internet gambling potential could grow to $1.5 billion over the next five years.

“At a 15 percent tax rate, this would yield $225 million in revenue to the state,” Sidamon-Eristoff said in the letter.

Sidamon-Eristoff has told lawmakers that he estimates Internet gambling revenues to reach $1.2 billion and result in $180 million in tax revenues during the first fiscal year of implementation in Atlantic City. The fiscal year begins July 1.

Under the enacted Internet gambling law, the Division of Gaming Enforcement is to deliver and implement online gambling regulations some time between late May and late November. The Wells Fargo estimates did not take that reduced timetable into account, Sidamon-Eristoff said.

“Wells Fargo estimated an initial impact, which did not benefit from a specific knowledge of the final legislation or our ultimate plans governing how quickly we would be able to roll out a fully functional system.” he said. “We also feel that Wells Fargo’s analysis underestimated the level of excitement, novelty and publicity that such a rare opportunity would create.”

Nevada and Delaware are the only other states to legalize Internet gambling.

Dennis Farrell Jr., the Wells Fargo senior analyst who issued the estimates Sidamon-Eristoff cited, said it was possible Internet gambling could gross $1.2 billion in the first year, but that there were many unknowns, including when the regulations would be published and when companies are ready to go online.

“Maybe they have an aggressive timeline,” he said. “The sooner, the better.”

Sen. Paul Sarlo, D-Bergen, Passaic, who grilled Sidamon-Eristoff on the estimates during a budget committee hearing earlier this month and asked the treasurer for a follow-up response on how the estimates were developed, said he remained skeptical, but accepted Sidamon-Eristoff’s answer.

“I’m shocked we even got a response,” Sarlo said. “At least we got a response.”

A new set of estimates on the size of New Jersey’s online gambling potential issued this week by London-based GamblingData projected gross gambling revenues of $262 million in the first year, basing the forecast on data from the Italian market, saying that country was chosen because its tax rate also is 15 percent and that it shares other comparable factors.

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