Time Magazine bashes US Online Gambling Revenues

In a fairly unbiased piece that was published earlier this week, Time Magazine points out just how far off previous United States online gaming revenue predictions have been. The article, which is written by Brad Tuttle, focuses on New Jersey and how they’ve now twice revised their internet gambling tax revenue projections from $180 million – to $160 million when Christie signed the bill last summer, to $34 million in early 2014.

One obvious issue facing New Jersey in their quest for more tax revenue is geolocation problems. In the beginning, around 75% of players within NJ state lines were rejected while trying to play real money poker and casino games. Luckily, this rate has significantly improved over the past few months. But there are still some players getting blocked around the state borders.

As the article points out, another huge problem has been credit card rejections. MasterCard has a 35% rejection rate while Visa is even higher at a 50% rate. There’s no timetable on when these numbers will slow down, but casinos/online gaming sites are working with credit card companies to hash all of this out.

Of course, none of this will make up for past losses due to the issues. As Tuttle discusses, the actual amount of tax revenue taken in by New Jersey so far is significantly lower than what was expected:

From the end of November, when legalized online gambling in New Jersey, through February 2014, a mere $4.2 million in tax revenues has been collected by the state, leading one legislative budget officer to now project an estimate of $12 million in revenues for the year, the Associated Press reported. The revised estimate for next year’s revenues was listed at $48 million. At that pace, it would take four or five years for the state to take in revenues equal to the amount it was supposed to collect in tax revenues during the first year of legal online gambling.

Delaware and Nevada have also had a rough time after launching their legalized online gaming markets. Delaware is pulling in less than $150k a month while Nevada, through its first-released set of statistics, showed just $824k in February internet gaming revenue.

Not surprisingly, Tuttle made sure to point out that lower-than-projected revenues aren’t Delaware, New Jersey and Nevada’s only problems. Sheldon Adelson’s Coalition to Stop Internet Gambling has been doing everything possible to make online gaming illegal. The group seems to lack any factual data on their key arguments – i.e. children gambling online and the widespread decay of society. However, Adelson is definitely a guy to be taken seriously since he’s worth over $27 billion and has his sights on ending internet gambling.