Egaming could save Atlantic City's future, says analyst
Wells Fargo analyst says gaming revenues would be boosted by US$650m and $850m with legal online gambling.
Legalising online gambling in New Jersey is one of Governor Chris Christie’s “last chances” to protect the future of Atlantic City, according to a leading analyst.
Dennis Farrell, a senior analyst for Wells Fargo, rejects the notion that regulating online gaming would cannabalise revenues of brick and mortar casinos, stating it would “provide a lifeline” to the resort town which has suffered from declining returns in recent years. Just six years ago, the city achieved its best gross gaming revenue since land-based gambling was legalised in the state, but profits have decreased ever since and last year the casinos recorded their worst results since 1993.
Christie has until 7 February to sign a bill into law which would permit New Jersey’s 12 casinos and racetracks to offer online poker and casino gaming. The legislation passed through the state Assembly and Senate with bipartisan approval last month.
Farrell’s report said that in the near term, he believes the New Jersey online market could generate between US$650m and $850m a year, based on 5.8m adult players and a per-capita annual online spend of $111-$149. That would mean an additional $150 million in new tax revenue each year.
“Opponents of the bill believe online gaming will lead to job losses at brick-and mortar casinos,” he wrote. “We beg to differ, as we believe online gaming sites operated by state casino operators will lead to job creation and drive visitation to Atlantic City.
“Companies should be able to cross market their online offerings with their gaming and non-gaming amenities, providing a significant advantage over Delaware, Pennsylvania and New York gaming facilities.”
However the Governor said earlier this week that he remains undecided on whether to sign the bill due to fears over potentially cannabilising land-based revenues and problem gambling.
Speaking on a radio show this week Christie said: “I haven’t made a final decision yet, but I have those two concerns, and you should know that that’s the way I feel. And [that was] in part the reason that I vetoed the bill before, in addition to some ways that it was constructed that made no sense, either.
“So I’m taking a very close look at it. I was reading it over the weekend, and reading the briefing from my staff in depth, and I’m going to have to make a decision in the next couple of days.”