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Credit Card Companies To Blame For Failed New Jersey Internet Gambling

New Jersey senator still optimistic on the future of online gambling.
Addressing the Mobile and Tablet Gambling Summit USA at Bally’s on Monday, New Jersey state Senator Ray Lesniak said he remains optimistic on the future of online gambling in New Jersey despite the slow first year of operations, which he attributed in part to the uncooperative posture adopted by several major credit card companies.
State regulators have reported just over $100 million in New Jersey revenue since the intrastate regulated and licensed online gambling regime launched in November...well short of politically inspired estimates during the legislative stage.
Addressing the credit card difficulties, in which several major credit card companies have obstructed online gambling transactions due to legal uncertainties, Lesniak told delegates:
“Don’t expect stellar results until the major credit card companies come on board.”
He was supported by Alex Bumazhny, a gaming analyst at Fitch Ratings, who said his firm expects legal Internet gambling in New Jersey to generate $120 million in 2014, with incremental, single-digit growth in following years.
“Right from the beginning we didn’t think that the original projections ... made sense,” he said. “We were among the more conservative analysts out there. We came out with a $200 (million) to $300 million projection for the first year.”
Bumazhny said the reason for the disappointing performance of the New Jersey market was that some major credit card companies and banks have hesitated to approve Internet gambling payments because online betting in America was long considered illegal under the Unlawful Internet Gambling Enforcement Act of 2006.
“I think it’s a legacy thought,” he said. “I think it’s just a matter of educating the payment processers that it is now legal.”
Paddy Power executive Eamonn Toland shared the view of Lesniak and Bumazhny, saying that the refusal of companies to process online gambling payments “ one of the biggest challenges to the industry."

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