US waiting to see if online bet is a winner

Casino operators are keen to know if  New Jersey’s internet foray will restore the sector’s fortunes

As bargain-hungry Americans braved crowded malls to hunt down Thanksgiving deals last week, some New Jersey residents decided to visit Atlantic City – from the comfort of their living room.

They could do so because of new rules legalising online gambling across the Garden State. Six Atlantic City casinos have set up virtual storefronts thus far, with customers creating more than 50,000 online gambling accounts since a trial period began last month.

The push is being watched across the nation: New Jersey, though the third state to legalise online gambling after Delaware and California, is by far the biggest in terms of population.

It also has the broadest regime, with the expansion extending beyond poker to a broader range of casino games. According to the analysts at the ratings agency Fitch, New Jersey’s move could generate up to $300m (£183m) in revenues in 2014, a figure that could rise to as much as $750m in subsequent years.

The state’s Republican Governor, Chris Christie, is even more optimistic: he expects about $1bn in revenues by July.

The big question is whether the online push will hurt business at the bricks-and-mortar casinos that populate Atlantic City, where annual gaming revenues have declined from over $5bn in 2006 to under $3bn, due largely, according to Fitch, “to the development of neighbouring markets”.

While online gambling won’t in itself revive the broader gaming business in New Jersey, lawmakers are betting that the new push will supplement, not eat into, business at Atlantic City’s casinos, and thus provide a much-needed shot in the arm to the industry.

If it works, the New Jersey experiment could become a template for other American states that are waiting in the wings with pro-online gambling legislation.

“Without online gaming, two casinos would have closed and 5,000 to 10,000 people would have been out of jobs in Atlantic City,” state senator Raymond Lesniak told The  Star-Ledger of New Jersey last week, explaining why the Governor, who is seen as a possible Republican Presidential candidate in 2016, “ultimately came around to signing legislation he had vetoed the year before last”.

The six casinos that have been granted permits have set up websites powered by various platforms, including Bwin, 888 and Betfair, which, in a half-yearly update to investors in London this week, singled out the US as an attractive long-term market for its business. Of its foray in New Jersey, for which it has partnered with the Trump Plaza Casino, Betfair said the initial signs had been promising.

Beyond New Jersey, research from the National Conference of State Legislatures, a non-governmental organisation that tracks policy across the US, shows eight states – California, Hawaii, Illinois, Iowa, Massachusetts, Mississippi, Pennsylvania and Texas – are hoping to jump on the bandwagon.

Those in favour of legalisation say that prohibition simply plays into the hands of black market operators, with the American Gaming Association, an industry group, claiming that “Americans spent nearly $3bn gambling with rogue offshore operators” last year.

“The internet cannot be forced back into the bottle – nor can market demand,” the group’s president, Geoff Freeman, said this month.

“New government efforts to prohibit online gaming will unintentionally strengthen black market providers, create more risk for American consumers, including children, and drive US jobs and potential revenues overseas.”

The opposition isn’t sitting back, however, with the billionaire casino mogul Sheldon Adelson reported to be preparing a public campaign aimed at convincing Congress to ban internet gambling. Mr Adelson, a prominent backer of Mitt Romney’s ill-fated Presidential run in 2012 and the chief executive of the Las Vegas Sands Corp casino business, created waves across the industry when he signalled his opposition to online gambling in a Forbes op-ed article published earlier this year.

He argued that not only would legalisation have a negative economic impact by hitting industry jobs, but said that “the plague it could bring to our society is even more far-reaching”.

“Online gambling makes it possible for bets to be placed by anyone at any time.

“When gambling is available in every bedroom, every dorm room and every office space, there will be no way to fully determine that each wager has been placed in a rational and consensual manner,” he said. According to The Washington Post, the billionaire has now hired lobbyists across the country to fight back against the online gambling push.

Next month, he is planning launch an advocacy group called the Coalition to Stop Internet Gambling to further press his case. Three former elected officials - the first African-American mayor of Denver, Wellington Webb, former US Senator Blanche Lincoln and former New York governor George Pataki - have been hired to speak for the group as national co-chairs.

“I am willing to spend whatever it takes,” Mr Adelson told Forbes this month after news of his plans first surfaced,  setting the stage for a major political fight over the issue  in 2014.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Guru Careers: Graduate Editor / Editorial Assistant

£16 - 20k: Guru Careers: A Graduate Editor / Editorial Assistant is needed to ...

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Day In a Page

Raif Badawi: Wife pleads for fresh EU help as Saudi blogger's health worsens

Please save my husband

As the health of blogger Raif Badawi worsens in prison, his wife urges EU governments to put pressure on the Saudi Arabian royal family to allow her husband to join his family in Canada
Birthplace of Arab Spring in turmoil as angry Tunisians stage massive sit-in over lack of development

They shall not be moved: jobless protesters bring Tunisia to a halt

A former North African boom town is wasting away while its unemployed citizens stick steadfastly to their sit-in
David Hasselhoff's new show 'Hoff the Record': What's it like working with a superstar?

Hanging with the Hoff

Working with David Hasselhoff on his new TV series was an education for Ella Smith
Can Dubai's Design District 'hipster village' attract the right type of goatee-wearing individualist?

Hipsters of Arabia

Can Dubai’s ‘creative village’ attract the right type of goatee-wearing individualist?
The cult of Roger Federer: What is it that inspires such obsessive devotion?

The cult of Roger Federer

What is it that inspires such obsessive devotion?
Kuala Lumpur's street food: Not a 'scene', more a way of life

Malaysian munchies

With new flights, the amazing street food of Kuala Lumpur just got more accessible
10 best festival beauty

Mud guards: 10 best festival beauty

Whether you're off to the Isle of Wight, Glastonbury or a local music event, we've found the products to help you
Unai Emery’s passion for winning and eye for a bargain keep Seville centre stage in Europe

A Different League

Unai Emery’s passion for winning and eye for a bargain keep Seville centre stage in Europe, says Pete Jenson
Amir Khan and James DeGale’s remarkable Olympic performances were just the start of an extraordinary journey - Steve Bunce

Steve Bunce on Boxing

Amir Khan and James DeGale’s remarkable Olympic performances were just the start of an extraordinary journey
Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf