Despite being one of the industries top supporters, even Senator Ray Lesniak of New Jersey is admitting that the state’s first year performance hasn’t met expectations. However, he is shifting part of the blame away from states to credit card companies.
On Monday, Senator Lesniak spoke via Skype to the Mobile and Table Gambling Summit USA. According to the Press of Atlantic City, he spent most of his time discussing why the state fell far short of initial predictions.
Original Predictions Didn’t Make Sense
When New Jersey decided to legalize most forms of Internet gambling, the state became the instant industry leader. Nevada chose to only legalize online poker, thus limiting their income potential.
Initial estimates for New Jersey iGaming fluctuated wildly according to the predicting firm, but some estimated that the state could possibly top $1 billion in revenue. With the state just barely bringing in a tenth of that figure, most now realize those estimates as unrealistic.
Fitch Ratings was among the most conservative of companies and initially predicted that the state would generate between $200 and $300 million for its first year. Alex Bumazhny, an analyst with the firm, stated, “Right from the beginning we didn’t think that the original predictions…made sense.” The company now predicts New Jersey to generate $120 million this year with only single-digit growth expected in subsequent years.
Credit Card Companies Hurting NJ iGaming According to Lesniak
Lesniak believes that one of the main factors behind that state’s lackluster performance is the refusal of credit card companies to process online gambling deposits. The reason behind this is that many major credit card companies look to the UIGEA and still believe that online gambling is illegal.
Lesniak told viewers on Monday, “Don’t expect stellar results until the major credit card companies come on board.” Bumazhny also commented on the attitudes of credit card companies, calling their opinion of online poker being illegal a “legacy thought.” He further stated that he believed that it was “just a matter of educating the payment processors that it is indeed legal.”