Challenges in the Rocky Start of New Jersey’s Online Gambling Industry
In the US, New Jersey is one of the only three states which have legalized online gambling. Though the industry is experiencing a rocky start, many are still hopeful that the current odds would ever be in their favor and that the online gambling industry
The State Treasurer of New Jersey announced that based on last year’s estimation, Atlantic City casinos would have a net profit of $1.2 billion on its first year which is equivalent to approximately $180 million in tax revenue. From last year’s $34 million tax revenue from the last fiscal year, it zoomed to $55 million the following year. The trend was brought about when online gambling in New Jersey went live November of last year.
James Kilsby, Gambling Compliance’s Managing Director, it is still on the early stage to draw conclusion about the profitability online gambling brings. But with the way revenue on taxes is increasing each month, there is a good projection that growth will be sustained and will probably prosper in the coming years.
It is difficult as of the moment for the state’s industry to prosper that easily because of several factors such as payment processing, and some technical and regulatory issues.
Payment Processing Concerns. Some major banks in New Jersey are still not confident in allowing credit cards to be used for deposits for online gaming. This is still a restriction despite the fact that New Jersey and other states have legalized online gaming transactions. Currently, the less convenient and traditional payment methods are being used like Atlantic City casinos deposits and Automated Clearing House transfers. There is no target date yet on when convenient payment processing options will be made available.
Technical Challenge. Verification of users’ identity is one thing that the state needs to make online gambling in New Jersey legal. Online gambling users must meet certain age requirements and should be residents of state borders. The development of the mobile industry would be a big leap towards this goal and revenue is projected to boost because of this.
Regulatory Concerns. The House and US Senate’s lawmakers have recently initiated some legislation to kill legal online gambling. An attest to this is the controversial bill to muffle online gambling in the US as supported by Sheldon Anderson who is a famous billionaire mogul.
These challenges should inspire the politicians to work harder to make the online gambling industry in New Jersey flourish. It might be a shaky start for the industry, but at least, according to Kilsby, online gambling regulations have been proven effective as evident in the 0% incidence of out-of-the state and underage players, money laundering, nor fraud.
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