A former gambling regulator from Malta regarded as an expert in online gambling development has been selected to help New Jersey implement Internet wagering by the end of the year.
The announcement, made by New Jersey Division of Gaming Enforcement Director David Rebuck at the East Coast Gaming Congress on Wednesday, came during a day of speakers who focused heavily on the impact Internet gambling could have on the state and Atlantic City's casinos.
A panel of Wall Street experts touted online gambling as the development that could finally turn around the Atlantic City market's declining revenues.
Rebuck said Mario Galea, who was selected from a field of seven applicants, will begin working with the state this week as it approaches its aggressive timeline for implementation of Internet gambling. Galea, of Random Consulting, is the former CEO of the Lotteries and Gaming Authority in Malta and has 15 years of experience in online gambling.
New Jersey law allows casinos to offer Internet gambling beginning Nov. 26. Rebuck sounded doubtful that the industry will be ready by that date because of all of the planning and preparations needed to introduce an entirely new form of gambling. He said it is more realistic to expect casinos to roll out Internet wagering between Thanksgiving and Christmas.
"It's so new, so you don't want to make a significant error that sets us back from implementing it," Rebuck said.
Speaking earlier in the day, a panel of Wall Street analysts said investors see signs of the Atlantic City market stabilizing with new attractions such as the $35 million Margaritaville-themed complex officially opening today at Resorts Casino Hotel. That should help offset the uncertainty that followed Revel's disappointing performance, panelists said. Still, it's Internet gambling that could be Atlantic City's savior, said Robert Heller, president of Spectrum Gaming Capital.
The Wall Street panelists suggested that Internet gambling could be as much as a $600 million annual market, yet stressed that it remains to be seen how the industry's overall earnings might be affected when people are allowed to gamble without physically being inside a casino.
"I'm probably one of the more bullish people on this," Macquarie Capital Senior Managing Director David Berman said. "It's a big boon for Atlantic City and New Jersey."
Later in the afternoon, New Jersey Assemblyman John Burzichelli told the conference that online wagering is a key piece of Atlantic City's hoped-for revitalization after six straight years of declines in gambling revenue. However, Burzichelli questioned Gov. Chris Christie's estimate that Internet gambling will generate $180 million annually in new state taxes.
"Frankly, sitting on the budget committee, I think that's overly optimistic," said Burzichelli, D-Salem, Gloucester, Cumberland. "But there will be new money. There will be new excitement."
State taxes on casino revenue already fund state programs benefiting New Jersey's senior citizens and disabled residents. Those programs will receive a boost when Internet gambling taxes kick in, Burzichelli said.
William Pascrell III, a New Jersey lobbyist, said in addition to the financial rewards, Internet gambling will create 2,000 new jobs in New Jersey in the first year alone. The prospect of so many new jobs has provided a powerful incentive for politicians to support Internet gambling, Pascrell added.
Gary Loveman, chairman and CEO of Caesars Entertainment, said that an increasingly mobile and tech-savvy customer base will demand the convenience of Internet gambling.
"Our websites have to speak to that," he said of the casinos reaching out to online customers.
Loveman expressed hope that online wagering will spread to become a nationwide phenomenon. So far, Nevada, New Jersey and Delaware are the only states to approve forms of Internet gambling for their casino industries.
During another panel discussion, Internet gambling experts said it will be important for New Jersey to enter into agreements with other states to boost revenue and create a nationwide system for online betting.
Gil White, a partner in Herzog, Fox and Neeman, said such agreements would allow New Jersey to become "the hub of Internet gaming in the United States."
Estimates vary wildly on the amount of revenue Internet gambling will generate for New Jersey - from $200 million to $1.2 billion per year. Eugene Johnson, a senior vice president of Spectrum Gaming Group, sees it as a $250 million to $300 million annual enterprise.
Johnson stressed that casinos will have to make Internet gambling a major part of their marketing campaigns to draw new customers to Atlantic City and maximize their profits. He said online gamblers tend to be younger, wealthier and better educated than the typical customers at land-based casinos.
"The challenge is, how do you attract them to come to your property?" Johnson said.
Keith Smith, president and CEO of Boyd Gaming Corp., parent company of Borgata Hotel Casino & Spa, believes that Internet gambling will expand the market - not cannibalize it, as some fear - for the land-based casinos.
"It is a way to bring a new customer here - a customer who has not made Atlantic City their destination of choice for entertainment," Smith said.
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