When New Jersey Governor Chris Christie predicted that online gambling would bring in better than billion in casino revenue and 0 million in taxes for the state, many analysts called the projection crazy.
So far, through the first two months of online gambling, the state is on pace to take in much less. Tax revenue from online gambling in New Jersey was $1.4 million in January, a pace that will have the state at about $10 million when the fiscal year ends June 30.
But was Christie’s projection really that crazy? The Bergen Record recently looked at the disparity.
The online rollout has been plagued with technical issues such as problems with geolocation software and payment processing. But those glitches had to have been expected.
In the end, the Record pointed to three factors that undermined Christie’s budget projection.
First, Christie’s administration estimate assumed that online gambling would be in place by July 1. Online gaming in New Jersey actually started November 26.
Second, a projected $1.1 billion in first-year gross online gaming revenues for the casinos was based on a Wells Fargo report that was far more optimistic than other industry projections.
And finally, the technical problems have included a reluctance by a number of banks and credit card issuers to process online gaming transactions. The problem has already been identified by the industry as one the state—and any online gambling operation—has to rectify quickly.
