Christie pledges to sign amended NJ egaming bill next week
New Jersey Governor says he could sign legislation into law as soon as 26 February.
Online gambling in New Jersey could be legalised as soon as next Tuesday with New Jersey Governor Chris Christie stating “there’s no reason not to sign” the bill into law if it includes his recommended changes.
The state Assembly and Senate will vote on Christie’s proposed amendments on 26 February with the Governor yesterday saying at an appearance in Lavallette, Ocean County that he could add his signature later that day or Wednesday “depending on how my day is going”.
The Senate president and Assembly speaker, Democrats Steve Sweeney and Sheila Oliver respectively, have already lent their support to Christie’s proposals for amending Senator Raymond Lesniak’s bill, made as part of a conditional veto earlier this month.
As part of the conditional veto Christie has proposed online winnings be taxed at 15% rather than 10% and that there should be a review of the legislation after 10 years of regulation. He has also asked for amendments to sections about gambling addiction and licence issuing fees and a requirement that state-elected officials disclose representations of entities which apply for or obtain licences.
The first year of a regulated egaming industry in New Jersey would generate a gross win of as much as US$410m, increasing to $590m four years later, data specialist H2 Gambling Capital has estimated in the forthcoming issue of eGaming Review due out next week.
H2’s revised numbers estimate that assuming a 1 January 2014 start date the first year of regulated online gambling activity “ all products currently provided by its Atlantic City land-based casinos including poker and casino and tables games “ would generate a gross win of approximately $410m with this increasing to just under $590m by 2018.
In the first five years of operation, H2’s revised forecast suggests that poker would account for 30% of the state’s gross win, with other table games and slots accounting for the remainder. H2 also believes that up to 12 more states would follow New Jersey and introduce some sort of egaming regulation in the coming five years as a result of Christie signing the bill into law taking the total number to 15.
In a note released yesterday Fitch Ratings described forthcoming egaming regulation in New Jersey as a “positive ratings consideration for Borgata and to [a] lesser extent for Caesars Entertainment”.
“Online gaming could grow Borgata’s EBITDA by US$10m relative to Borgata’s EBITDA of $140.5m for the last-12 month period ending Sept. 30, 2012,” it said. “For Caesars, Fitch assumes 40% online gaming revenues market share, which equates to $20m in incremental EBITDA. Like with Borgata, Fitch’s market share assumption corresponds to Caesars’ land-based market share,” it added.
The warning in Fitch’s note that “the prospect of participating in online gaming has been keeping unprofitable casinos open” has been followed by the news that the $2.4bn Revel Casino, which only opened in April last year and was intended to revitalise Atlantic City, is to file for Chapter 11 bankruptcy this month.
The arrangement is intended to give creditors a greater equity stake in the casino, secure debtor-in-possession financing, reduce its debt and allow the casino to remain open.
Revel chief investment officer Michael Garrity said in a statement: “This restructuring positions Revel for long-term success by providing the company with the operational flexibility to invest in the growth of our business.”
However, the development has been greeted with criticism from a “disappointed” Sweeney and casino union Unite-Here Local 54 president Bob McDevitt: “We warned them this would be a catastrophe, but no one listened. Now, it’s a catastrophe.”
Another casino which has been struggling is the Atlantic Club Casino, set to be acquired by PokerStars, which has also welcomed Christie’s response to the push for egaming.