Gov. Chris Christie’s predictions the state will reach $1 billion in online gambling revenue this fiscal year appear increasingly unlikely in light of new data showing the industry has brought in just $8.4 million to date.
The data left one Democratic state senator who has championed the legalization of online wagering criticizing the Republican governor for raising expectations to unreasonable levels.
On Tuesday, state Sen. Ray Lesniak, D-Union, made statements suggesting that Christie, who is currently under fire for a scandal involving lane closures on the George Washington Bridge, has knowingly promoted false predictions for the industry.
“The governor ... cooked the numbers and vastly inflated them,” Lesniak said. “As I expected ... it’s a decent start, and it will keep growing. It’s important to know what’s behind these numbers, and it is that they will keep casinos from closing.”
Christie spokesman Michael Drewniak did not respond to a request for comment Tuesday night. Christie gave his State of the State address in Trenton on Tuesday afternoon, not making any mention of Atlantic City or online gambling.
New Jersey casinos saw $7.4 million in online revenue in December alone, and another $1 million was registered since the launch in late November, according to data released by the New Jersey Division of Gaming Enforcement on Tuesday. As of Jan. 5, 148,487 Internet gambling accounts have been created in the state.
While industry leaders say they’re pleased with that number and expect it to rise in light of ramped-up marketing campaigns, the results left others questioning how significant an impact online gambling will have in the state.
Borgata Hotel Casino & Spa and Caesars Interactive Entertainment, which holds two Internet gambling permits for Caesars Atlantic City and Bally’s Atlantic City, are dominating the burgeoning market. Combined, the two companies brought in $6.1 million, or 73 percent of the total online gambling revenue in the state.
Borgata, which has teamed with bwin.party to offer online gambling, saw $3.8 million, leading the Atlantic City pack. Seven of Atlantic City’s 11 casinos have Internet gambling permits. In New Jersey, a company must team up with a land-based property to offering online wagering.
Joe Lupo, senior vice president of operations at Borgata, said he believes the majority of analysts who predicted between $300 million and $500 million for the industry in its first year are realistic. If the industry continued at its current rate, the state would see less than $100 million annually, but Lupo said increased marketing efforts from all of the properties should steadily increase revenues.
“I think the Borgata name speaks for itself. We’re the most powerful brand in the state,” Lupo said. “Our advertising dollars were low in the month of December because we wanted to make sure the platform worked, and we met customer expectations. With increased marketing, I expect to see revenue increases.”
New Jersey is banking on online gambling to create a turnaround for Atlantic City’s casino industry, which has seen seven consecutive years of revenue decline amid increased competition from other states. Year-end numbers released Tuesday showed a 6 percent drop as the resort’s casinos raked in $2.86 billion in gambling revenue in 2013. That puts gambling revenue in the state to 1989 levels.
Chad Beynon, an analyst with Macquarie Capital Inc., called New Jersey’s numbers disappointing, but noted that as advertising campaigns kick up, the numbers could increase.
“With 7 million adults in New Jersey and others who may stop in, we estimate the market to grow to $200 million to $300 million by 2015, cannibalizing $25 million to $50 million of land-based revenues,” Beynon wrote.
Still, American Gaming Association President and CEO Geoff Freeman issued a statement praising New Jersey’s online gambling launch and suggesting the market only supports brick-and-mortar properties.
“New Jersey’s online gaming structure will likely strengthen the economic contributions brick-and-mortar casinos already deliver through job creation and increased tax revenues,” Freeman said. “The New Jersey experience is a testament to the power of effective regulation, and I am optimistic the bold move into online gambling will later be viewed as a positive and pivotal time for the gaming industry, our employees and the communities we support.”
Meanwhile Tuesday, the New Jersey Division of Gaming Enforcement made drastic changes to the way it reports gambling data to the public. Reports for Atlantic City’s brick-and-mortar casinos have included breakdowns of win by table game and slot machine denomination since the inception of gambling in Atlantic City.
On Tuesday, however, that detail was removed from the state’s reports.
DGE spokeswoman Lisa Spengler said those details are now considered confidential, according to a temporary regulation that went into effect Monday.
“The new form is consistent with reporting from other jurisdictions and continues to provide a high level of transparency,” Spengler said in an email.
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