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New Jersey Online Gambling Looking Optimistic

Sunday January 19 , 2014 :  OPTIMISTIC OUTLOOK FOR NEW JERSEY ONLINE GAMBLING
 
Operators look forward to building the sector this year.
 
Over the weekend an Associated Press news agency article achieved wide currency, reporting that operators were generally upbeat about the prospects for the online gambling market in New Jersey.
 
Pessimistic media reports bemoaning the lower than expected revenues of $8.4 million over the first six weeks of operational activity suggested that full year revenues would fall well short of political and analyst forecasts, but a number of positive developments are shaping up which will have an impact.
 
"Everybody needs to take into consideration that this industry is in its infancy," Tony Rodio, president of the Tropicana Casino and Resort, told AP. "There will be mobile applications, and a lot of the slot content isn't operational yet.
 
"I'm encouraged by how many user accounts that people have signed up for and that there's interest in it. You'll see this grow quickly."
 
Rodio predicted that the addition of Internet gambling will be enough to end a seven-year losing streak for Atlantic City's casinos, whose revenue has fallen every year since 2007, when neighbouring Pennsylvania ramped up its own land casino industry.
 
Associated Press says the number of accounts opened in New Jersey has now reached 155,374 as of January 12.
 
Thomas Winter, the Golden Nugget's vice president of online gambling, said the casino is pleased with its start and is expecting substantial growth of 20 percent per month this year.
 
Winter agreed with executives at the Borgata, who last week said online gambling doesn't appear to be cannibalising the existing land-based casino's business.
 
Like the Borgata, Winter found that over 50 percent of online punters who signed up were not previously regular customers at the Golden Nugget, or were not customers at all.
 
Long-range estimates are that 60 to 70 percent of online players will not be regular customers of the physical casino - creating a marketing opportunity to encourage them to do so, Winter said.
 
Peggy Holloway, senior vice president of Moody's Investors Service, wrote in a report last week that Internet gambling may take a while to build momentum:
 
"While internet gaming is starting off slowly, the pace of growth will accelerate as issues with payment processing and geo-location technology are ironed out and operators ramp-up their marketing spending to educate consumers that online gambling is available," she wrote, repeating the firm's estimate that Internet gambling should generate $250 million to $500 million a year.
 
Chad Beynon, an analyst with Macquarie Capital estimated that the New Jersey market could grow to $200 million to $300 million by 2015, but may cannibalise $25 million to $50 million of land-based revenues.
 
"We do note that it's early and many of the TV advertisements have just recently started," he wrote.
 
David Rebuck, director of the state Gaming Enforcement Division, told Associated Press that he is pleased with progress thus far. He said that problems with geo-location technology are being resolved, and the overall technology appears to be working well.
 
"Internet gaming remains in its infancy in New Jersey," he said. "From a regulatory perspective, the systems are working as anticipated and we are encouraged by the operations. I am optimistic that we will see continued growth as the properties begin to increase their marketing efforts to attract more customers."



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