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Online Gambling Could Save Atlantic City
04/09/2012 : ONLINE GAMBLING COULD MAKE THE WORLD OF DIFFERENCE TO ATLANTIC CITY
Declining land casino revenues could be boosted by legalised internet gambling
Brigid Callahan Harrison, is professor of political science and law at Montclair State University, came out in support of online gambling provided via Atlantic City land casinos in an op ed piece over the weekend in North Jersey.
Commenting on the passage of Sen Ray Lesniak and Sen. Jim Whelan's latest legalisation bill through the Senate Budget and Appropriations Committee last week, the professor wrote that a successful outcome could have an enormous potential impact on the entire state economy.
"Casinos pay taxes - hefty ones - in return for the privilege of collecting Grandma's nickels and Uncle Paulie's blue chips: among the most substantial of these taxes is the 8 percent tax on their gross proceeds," Professor Harrison wrote. "The revenue collected by the state through this tax is constitutionally dedicated to fund services for New Jersey's senior citizens or disabled residents."
The professor goes on to reveal that in its heyday in fiscal year 2005, Atlantic City casinos contributed more than $500 million to the Casino Revenue Fund, but that in fiscal year 2011, casinos paid only $257 million.
Following competitive pressure from neighbouring Pennsylvania, this year estimates have the contribution at below half 2005 levels at $248 million. Taxpayers have had to make up the difference, and this year the state will contribute almost $620 million to the programs funded, up from $377 million in 2006.
"This [legalisation] bill could help those numbers recover," Professor Harrison opines. "The bill is designed to position New Jersey as the premier American venue for legal Internet bets. And if the strategy works, it could prove a game-changer for the casinos and for the state, which could become the flagship virtual home of a burgeoning multi-billion dollar industry.
"Internet gambling proceeds would be taxed at 10 percent and makes the wagers placed online using Atlantic City's sites legal, unless the state Division of Gaming Enforcement determines a wager violates federal laws," she adds, commenting that holding up Internet gaming because of shortsighted parochial concerns will undermine the state's efforts to take advantage of the opportunity.
Those parochial concerns include efforts by the state's horseracing industry to also offer internet gambling, a move that implies the need for constitutional amendments and consequent delays that New Jersey can ill afford, Harrison notes.
In the Atlantic City casinos, the state already has a corporate gaming infrastructure that can make the transition into online gambling fast and easy without constitutional complications.
"Quick passage of this legislation would give New Jersey the edge over California and Nevada, which are considering similar legislation. And that edge could mean the difference between all of New Jersey's taxpayers having a growth industry subsidizing state expenditure versus being a Johnny-come-lately to an industry that some other state got a toehold in," she concludes.
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